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FINAL  REPORT 

OF 

UNITED  STATES 
LIQUIDATION  COMMISSION 

WAR  DEPARTMENT 


UC-NRLF 


IN  B.  PARKER.  Chairman 


WASHINGTON 

GOVERNMENT  PRINTING  OFFICE 

1920 


FINAL  REPORT 

OF 

UNITED  STATES 
LIQUIDATION  COMMISSION 

WAR  DEPARTMENT 


BY 

EDWIN  B.  PARKER,  Chairman 


WASHINGTON 

GOVERNMENT  PRINTING  OFFICE 

1920 


CONTENTS. 


A.  FINAL   REPORT. 

Page. 

I.  Sales 5 

II.  Settlements 6 

B.  BRIEF   REVIEW. 

I.  Organization  and  functions 11 

II.  Sales 16 

Sales  to  the  Republic  of  France 16 

Sales  for  "  Liberated  Nations  " 28 

Gift  to  Red  Cross 30 

Commercial  sales  of  property  located  in  France 31 

Belgian  sales  and  general  settlement 35 

Sales  in  Germany 34 

Sales  in  England 38- 

Smnmary   of   sales 40' 

III.  Settlements  of  claims 41 

Settlements  with  Great  Britain 42 

British  artillery  and  ammunition  settlement 43- 

Australian  wool  settlement 45 

The  Cuthell  settlement 47 

Settlement  of  tank  agreements 48 

British  Liberty  motor  settlement 52 

British  interest  claim 52 

Liquidation   of   nitrate   pool 54 

Bills,  accounts,  and  claims  pending  in  Great  Britain 56 

Excess  costs  claim 56 

Overhead   expense   claim 59 

Supplemental  claim  for  railway  transportation 59 

Contract  claims  of  nationals 60 

Settlements  with  France 61 

French  artillery  and  ammunition  settlement 61 

French   aircraft  settlement 63 

Liberty  motor  settlement 65 

French    transportation    settlement 66 

French    port    dues    settlement 70 

General  settlement  with  the  French  Government 72 

Indemnification  of  America  by  France  against  all  claims  of 
nationals  for  torts,  workmen's  compensation,  rents,  requi- 
sitions, and  damages 74 

Summary 78 

General  settlement  with  Belgium 79 

General  settlement  with  Italy 79 

Negotiations  for  settlement  with  Luxembourg 81 

IV.  Conclusion 82: 

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FINAL  REPORT  OF  THE  UNITED  STATES  LIQUIDATION  COMMISSION- 
WAR  DEPARTMENT. 


To  the  honorable  the  Secretary  of  War  :  '    '•>">'-'    ^.^  :\t  <',  r*\ 

The  United  States  Liquidation  Commission — War  Department 
was  created  February  11,  1919,  "as  the  central  agency"  (1)  to  dis- 
pose of  America's  surplus  war  stocks  in  Europe,  and  (2)  to  settle 
all  claims  and  accounts  betAveen  Allied  Governments  and  their 
nationals  on  the  one  part  and  the  United  States  War  Department  on 
the  other  part,  growing  out  of  or  in  anywise  connected  with  the  war. 

The  duties  and  responsibilities  of  the  Commission  have  fallen 
naturally  into  two  general  divisions:  (1)  Sales  and  (2)  settle- 
ments of  accounts  and  claims. 

Sales. — The  stocks,  the  disposition  of  which  constituted  a  part 
of  the  Commission's  task,  were  located  chiefly  in  France,  but  some  of 
them  were  in  Great  Britain,  some  in  Germany,  Holland,  Belgium, 
Spain,  Portugal,  and  Italy.  Out  of  them  more  than  2,000,000  men 
were  fed,  supplied,  and  equipped  pending  their  return  to  America  at 
the  rate  of  approximately  250,000  men  per  month  until  the  return 
transportation  was  completed  the  latter  part  of  1919.  Supplies  and 
equipment  of  the  estimated  value  of  $672,000,000  were  returned  to 
the  United  States.  The  balance  was  sold  in  Europe  for  $822,- 
923,225.82. 

Sales  of  approximately  $108,700,000  were  made  for  cash  on  de- 
livery ;  sales  of  approximately  $532,500,000  were  made  to  the  French 
Government;  sales  amounting  to  about  $29,000,000  were  made  to 
Belgium;  and  sales  aggregating  $140,100,000  Avere  made  to  Poland, 
Czechoslovakia,  Serbia,  Roumania,  and  other  so-called  liberated 
nations  of  Central  Europe  and  the  Near  East.  Those  made  to  the 
nations  mentioned  are  evidenced  by  their  5  per  cent  interest-bearing 
bonds  maturing  from  2  to  10  years  after  date.  Other  sales  were 
made  on  short-term  credits,  which  have  been  or  are  being  collected  by 
the  appropriate  Army  services. 

The  most  important  sale  consummated  was  what  is  known  as  the 
"  Bulk  sale  to  France  "  of  surplus  war  stocks  remaining  unsold  in 
France  on  August  1,  1919;  the  considerations  moving  from  France 

5 


6  UNITED  STATES  LIQUIDATION   COMMISSION. 

being  (a)  $400,000,000  in  10-year  5  per  cent  bonds;  (h)  the  assump- 
tion by  France  of  all  rents  for  installations  accruing  after  August  1, 
1919,  and  the  agreement  of  France  to  hold  America  harmless  against 
all  claims  (numbering  approximately  150,000)  of  every  nature  what- 
soever arising  out  of  American  occupation  and  use  of  such  installa- 
tions and  lands;  and  (c)  the  waiver  by  France  of  all  claims  whatso- 
ever (conservatively  estimated  at  $150,000,000)  for  taxes  or  customs 
duties  on  properties  imported  into  France  and  sold  since  April  6, 
1917.  ^^^1/ 

Eight  hundred  and.  eighty-one  thousand  nine  hundred  and  nine 
animals  were  sold  for  $35,133,065.02. 

Pursuant  to  an  act  of  Congress  passed  in  July,  1919,  the  Secretary 
of  War,  acting  through  the  Commission,  delivered  to  the  American 
Ked  Cross,  without  cost  to  it,  medical,  surgical,  and  hospital  sup- 
plies and  equipment,  and  dietary  foodstuffs  of  the  value  of 
$9,964,851.16. 

Settlements. — The  settlement  of  the  mutual  claims  between  the 
United  States  War  Department  and  the  nations  associated  with  us  in 
the  war  have  for  the  most  part  taken  the  form  of  a  series  of  contracts 
of  adjustment.  Wherever  possible,  controversies  were  composed, 
mutual  accounts  stated,  and  a  balance  struck,  so  that  by  this  set-off 
process  cash  payments  were  reduced  to  a  minimum.  The  principal 
contracts  of  this  nature  may  be  briefly  summarized  as  follows : 

(1)  A  contract  whereby  France  assumed  all  of  our  obligations  to 
the  railroads  of  France,  covering  all  services  rendered  from  our 
entry  into  the  war  to  October  1,  1919,  upon  our  agreement  to  pay 
434,985,389.73  francs.  This  payment  settles  all  bills  for  carrying  and 
re-carrying  more  than  2,000,000  men  over  the  longest  lines  of  com- 
munication of  any  of  the  Allied  Armies,  including  their  travel  on 
leave;  for  carrying  the  American  Army  of  Occupation  over  French 
railroads  to  and  from  Germany ;  and  for  transporting  and  handling 
over  15,000,000  tons  of  freight.' 

(2)  A  contract  whereb}^  France  assumed  all  obligations  to  local 
chambers  of  commerce  and  other  claimants  for  costs  incurred  in  rais- 
ing water  levels  for  our  use  and  benefit  and  for  all  charges  for  i^ort 
dues  for  the  entry  of  American  vessels  in  French  ports  between 
April  6,  1917,  and  the  time  of  the  complete  evacuation  of  France  by 
American  forces,  upon  our  paying  3,000,000  francs. 

(3)  A  contract  whereby  France  assumed  all  claims  of  an}^  person, 
organization,  association,  corporation,  commune,  or  department  of 
France  against  America  for  damage  to,  use,  or  loss  of  property,  or 
injury  to  or  death  of  persons,  arising  between  April  6,  1917,  and 
December  81,  1919,  upon  the  payment  by  America  of  12,000,000 
francs. 


UNITED  STATES  LIQUIDATION   COMMISSION.  7 

(4)  A  contract  of  general  settlement  with  France,  dated  Novem- 
ber 25,  1919,  finally  and  for  all  time  disposing  of  all  claims  and  con- 
troversies between  France  and  the  War  Department  of  the  United 
States,  by  the  terms  of  which  France  acknowledged  an  indebtedness 
to  America  (in  addition  to  the  $400,000,000  evidenced  by  bulk  sale 
bonds)  of  $177,149,866.86,  and  America  acknowledged  an  indebted- 
ness to  France  (in  addition  to  the  amounts  mentioned  in  the  three 
preceding  paragraphs)  of  1,488,619,027.52  francs. 

(5)  A  contract  of  general  settlement  with  Belgium,  dated  Novem- 
ber 17,  1919,  finally  and  for  all  time  disposing  of  all  claims  and  con- 
troversies between  Belgium  and  the  AVar  Department  of  the  United 
States,  by  the  terms  of  which  Belgium  acknowledges  a  net  balance 
due  the  United  States  of  $27,162,720.93,  evidenced  by  three-year  5 
per  cent  bonds. 

(6)  A  contract  of  general  settlement  w^ith  Italy,  dated  February 
18,  1920,  finally  disposing  of  all  claims  between  Italy  and  the  War 
Department  of  the  United  States,  showing  a  net  balance  in  favor  of 
Italy  of  the  sum  of  29,106,546.75  lire,  which  has  been  paid. 

(7)  Contracts  with  Great  Britain,  whereby  (a)  the  United  States 
was  relieved  from  the  payment  of  all  indemnity  claims  under  con- 
tracts for  the  purchase  of  artillery  and  ammunition  in  process  of 
manufacture,  upon  the  purchase  by  and  delivery  to  the  United 
States  at  cost  of  completed  artillery  units  and  ammunition  equal  to 
such  claims ;  ( & )  the  United  States  was  relieved  of  a  contract  to  take 
delivery  of  210,000  bales  of  Australian  wool,  at  a  cost  of  approxi- 
mately $38,800,000,  without  the  payment  of  any  indemnity;  (c)  the 
Anglo-American  tank  enterprise  was  liquidated,  yielding  the  United 
States  6,000,000  francs;  (d)  mutual  interest  claims  were  settled 
covering  a  long  period,  resulting  in  the  payment  to  Great  Britain  of 
£797,854;  and  (e)  the  nitrate  pool  was  liquidated. 

( 8 )  Numerous  claims  by  nationals  of  France,  Great  Britain,  Italy, 
Spain  and  Switzerland,  principally  for  indemnity  growing  out  of  the 
cancellation  of  war  contracts,  have  been  considered  and  disposed  of ; 
446  claims  which,  expressed  in  dollars  at  the  normal  rate  of  ex- 
change, totaled  $17,427,175.41,  were  settled  by  the  payment  of  $8,413,- 
984.19;  while  53  claims,  aggregating  in  amount  $739,894.91,  were 
rejected. 

Some  conception  of  the  Commission's  task  can  be  formed  from  (a) 
the  statement  of  amounts  involved  in  the  settlements  negotiated  and 
actually  consummated  by  and  under  the  direction  of  the  Commission 
of  mutual  accounts  and  claims  between  the  United  States  War  De- 
partment on  the  one  part  and  the  Allied  Governments  and  their 
nationals  on  the  other  part  (which  settlements  were  where  possible 


8  UNITED  STATES  LIQUIDATION   COMMISSION. 

consummated  through  set-offs  without  cash  payments)  and  (h)  the 
amount  of  sales  of  property  made  by  the  Commission,  as  follows : 

Amounts  involved  in  settlements: 

Settlements  with  France $748,392,004.82 

Settlements  with  Great  Britain 112,996,912.16 

Settlements  with  Belgimu 2,  279,  827. 12 

Settlements   with    Italy 12,620,173.75 

Settlements  with  individuals,  associations,  and  others 17,  427, 175.  41 

Total  amount  involved  in  settlements S93,  716,  093.  26 

Amounts  of  sales: 

Bulk  sale  to  France 400,  <X)0,  000.  00 

Other  sales,  stated  in  dollars 377,905,193.23 

Other  sales,  stated  in  francs  and  converted 45,018,032.59 

Total  amount  of  all  sales 822,923,225.82 

The  Commission  was  created  February  11,  1919.  The  two  re- 
maining commissioners  are  herewith  tendering  their  resignations  on 
this  the  31st  day  of  May,  1920.  The  total  expenses  incurred  and 
disbursements  made  by  the  Commission  aggregate  $222,883.17. 
These  expenditures  are  a  trifle  less  than  thirteen  one-hundred-thou- 
sandths (0.00013)  of  the  amounts  involved  in  settlements  made  and 
sales  negotiated  by  the  Commission. 

There  is  annexed  to  this  report  a  brief  review  of  the  activities 
of  this  Commission.  There  is  also  forwarded  a  bound  volume  of  the 
minutes  of  the  daily  meetings,  comprising  470  closely  typewritten 
pages,  with  an  index.  The  files  of  the  Commission  have  been  re- 
viewed, indexed,  and  delivered  to  your  representative. 

The  Commission  desires  to  acknowledge  the  loyal  and  efficient 
services  rendered  by  the  several  members  of  its  staff,  without  Avhicli 
the  performance  of  its  tasks  would  have  been  impossible.  It  is 
also  the  pleasure  and  privilege  of  this  Commission  to  acknowl- 
edge that  in  the  performance  of  its  tasks  it  has  had  the  whole- 
hearted and  efficient  support,  assistance,  and  co-operation  of  the  mili- 
tary forces,  particularly  of  Gen.  John  J.  Pershing,  commander-in-chief 
of  the  American  Expeditionary  Forces;  of  Maj.  Gen.  J.  G.  Harbord, 
commanding  general  of  the  Services  of  Supply,  and  later  of  his 
successor,  Brig.  Gen.  William  D.  Conner ;  and  the  chiefs  of  all  of  the 
services  and  the  members  of  their  respective  staffs.  AVhile  the  Com- 
mission sometimes  found  itself  handicapped  and  its  work  impeded 
for  want  of  complete  and  accurate  records,  the  only  wonder  is  that 
the  records  were  as  nearly  complete  and  accurate  as  we  found  them. 
The  whole  heart  and  mind  and  effort  of  the  American  Expeditionary 
Forces  were  bent  on  driving  forward  to  Avin  the  Avar,  not  to  make 
paper  records,  and  the  ordinary  rules  of  business  and  of  commer- 
cial usages  did  not  and  should  not  have  obtained.     For  this  and 


UNITED  STATES  LIQUIDATION   COMMISSION.  9 

other  reasons,  it  was  particularly  important  that  our  liquidation 
in  Europe  should  be  accomplished  as  speedily  as  possible  and  be- 
fore the  officers  and  men  who  were  familiar  with  various  under- 
takings should  be  demobilized  and  their  services  no  longer  avail- 
able. It  is  believed  that  not  the  least  of  the  beneficial  effects  flow- 
ing from  this  speedy  liquidation  was  the  rendering  possible  of  the 
prompt  return  to  their  homes  and  to  their  normal  pursuits  of  our 
soldiers  drawn  from  civil  life.  The  evacuation  of  Europe  by 
American  troops  has  been  accomplished  in  a  phenomenally  slTort 
time,  and  the  work  of  liquidation  of  both  stocks  and  claims  has  kept 
pace  Avith  it.  The  United  States  has  been  relieved  of  the  trouble 
breeding  task  and  of  the  enormous  overhead  expense  of  disposing 
at  retail  of  the  irregular,  unbalanced,  and  rapidly  deteriorating 
stocks  located  3,000  miles  from  home.  The  settlement  of  claims 
has  eliminated  countless  opportunities  for  annoying  controversies 
which  might  have  proved  endless  sources  of  bitterness  between  us  and 
the  Governments  and  peoples  of  our  Allies.  Slightly  over  a  year 
after  the  signing  of  the  armistice,  Ave  find  the  Army  home,  bringing 
w^th  it  the  good-will  of  the  Governments  and  their  nationals  with 
whom  America  made  common  cause,  the  surplus  stocks  have  been 
sold,  and  practically  every  claim  settled. 

Respectfully  submitted, 

Edwin  B.  Parkek, 
Chairman^  United  States  Liquidation  Com/mission — 

Wa/r  Department. 
Washington,  D.  C,  May  31, 1920, 


BRIEF  REVIEW  OF  THE  ACTIVITIES  OF  THE  UNITED  STATES  LIQUIDATION 
COMMISSION— WAR  DEPARTMENT. 


I.  ORGANIZATION  AND  FUNCTIONS. 

The  signing  of  the  armistice,  November  11,  1918,  found  the  United 
States  and  the  nations  associated  with  her  in  the  Avar  ahnost  as 
unprepared  for  peace  as  they  had  been,  a  few  years  before,  unpre- 
pared for  war.  The  various  powers  had  continued  to  press  their 
military  operations  with  full  vigor  up  to  the  very  last  moment. 
It  would  not  have  been  prudent  to  do  otherwise,  for  there  was 
always  a  chance  that  the  armistice  might  be  rejected  or  delayed. 
The  constant  flow,  therefore,  of  both  men  and  materials  into  France 
continued  without  interruption  to  the  very  end. 

Numerous  stocks  had  been  assembled  by  the  United  States  both 
at  home  and  abroad,  for  the  equipment  and  supply  of  over  2,000,000 
men  in  France  and  over  2,000,000  more  at  camps  in  the  United 
States  and  rapidly  moving  tow^arcl  France.  On  November  11,  1918, 
the  greater  part  of  these  stocks  became  surplus. 

Where  and  how,  to  whom,  and  on  what  terms  should  these  stocks 
be  sold?  What  were  the  needs  of  the  various  nations  of  Europe 
with  respect  to  them?  To  what  extent,  if  at  all,  w^as  it  practicable 
for  our  Government  to  transport  them,  by  land  or  by  sea,  with 
both  kinds  of  transportation  demoralized  by  the  war?  To  what 
extent  could  commerce  absorb,  for  peace-time  uses,  the  vast  stores 
of  stocks  assembled  by  the  various  nations  for  purposes  of  war? 
To  what  extent  could  France,  Belgium,  and  the  "  Liberated  Na- 
tions "  of  Central  Europe  use  them  to  repair  their  wasted  and  dev- 
astated areas?  Could  these  stocks  be  an  important  factor  in  re-es- 
tablishing industry  and  a  normal  state  of  affairs  in  the  countries 
threatened  by  Bolshevism?  In  the  light  of  the  impoverished  con- 
dition of  many  of  the  peoples  of  Europe,  as  a  result  of  war,  who 
was  in  a  position  to  pay  for  what  should  be  bought,  and  to  whom 
could  credit  be  properly  extended?  In  the  light  of  the  unprece 
dented  fluctuations  in  the  rates  of  exchange  of  the  currencies  of  the 
various  nations,  which  of  them  could  afford  to  pay  in  terms  of 

11 


12  UNITED  STATES  LIQUIDATION   COMMISSION. 

money  acceptable  to  our  Government,  and  to  whom  could  dollar 
credits  be  given? 

Our  Government  was  suddenly  called  upon  to  turn  from  the  busi- 
ness of  makintr  war  to  answer,  and  to  answer  promptly,  all  of  these 
and  numerous  other  questions  involved  in  the  disposition  of  the 
surplus  war  stocks,  and  the  liquidation  of  war  claims.  While  it  may 
be  that  men  of  experience  and  ripe  judgment  might  have  held  diver- 
gent views  regarding  the  answer  to  some  of  these  duestions,  there 
was  one  point  on  which  all  of  the  people  of  the  Ignited  States  agreed, 
namely,  that  Avhatever  the  cost,  Avhatever  the  inconvenience,  the  men 
who  had  been  sent  across  the  water  to  wage  war,  now  that  the  vic- 
tory had  been  won  and  their  purpose  accomplished,  should  be 
speedily  returned,  demobilized,  and  permitted  to  resume  their  former 
pursuits,  to  live  their  own  lives,  in  their  own  country,  in  order  that 
that  country  might  return  as  rapidly  as  possible  to  normal  conditions. 

The  cost  to  the  Nation  of  maintaining  this  civilian  soldiery  abroad 
was  veiy  great,  not  only  as  a  drain  on  the  Public  Treasury,  but  also 
on  the  private  fortunes  of  the  men  and  on  the  industrial  conditions 
of  the  country.  The  demand  for  their  prompt  return  was  so  insistent 
and  so  persistent  that  frequently  other  considerations  had  to  yield : 
and  it,  in  no  small  measure,  determined  the  solution  of  many  of  the 
problems  of  liquidation.  The  men  who  were  tired  from  the  fighting 
and  elated  by  the  victoiy  could  not  be  asked  to  remain  indefinitely 
to  engage  in  merchandizing,  either  at  wholesale  or  at  retail,  the 
numerous  stocks  which  had  been  assembled  for  war. 

It  was  believed  that  a  civilian  commission,  working  in  co-ordination 
w4th  the  commander-in-chief  of  the  American  Expeditionary  Forces 
and  with  the  commanding  general  of  the  Services  of  Supply,  and, 
through  them,  with  each  service  of  supply,  could  be  more  effective  as 
a  central  agency  for  directing  the  licpiidation  of  stocks,  and  the 
adjustment  of  claims  in  Europe  than  could  a  purely  military  body. 

It  was  believed  that,  under  the  legislation  existing  at  the  time,  the 
Secretary  of  War  could,  by  direction  of  the  President  and  as  an 
incident  to  the  war,  create  such  a  commission  and  clothe  it  with  suit- 
able power  to  dispose  of  these  claims  and  of  these  surplus  stocks.^ 

In  order,  however,  that  all  possible  doubt  on  the  legality  of  the 
Commission's  power  might  be  removed.  Congress  passed  an  act  which 
became  law  on  March  2,  1919,-  conferring  power  on  the  Secretary 
of  War,  "  through  such  agency  as  he  might  designate  or  establish,  to 
make  equitable  and  fair  adjustments"  of  claims  arising  out  of  war- 
time agreements  or  negotiations. 

1  See  Appendix  I  for  the  text  of  the  Act  of  May  10,  1918,  and  of  the  Act  of  July  9,  1918, 
both  authorizing  sales  of  war  supplies  to  associated  nations  and  to  individuals,  corpora- 
tions, and  societies. 

»  See  Appendix  II  for  the  text  of  section  3  of  the  Act  of  March  2,  1919,  granting  to 
the  Secretary  of  War  power  to  make  equitable  adjustments  of  war  claims. 


UNITED  STATES  LIQUIDATION   COMMISSION.  13 

The  United  States  Liquidation  Commission — War  Department, 
which  will  be  referred  to  in  this  report  as  the  "  Commission,-'  was 
created  by  General  Orders,  No.  24,  issued  February  11,  1919,^  and 
designated  as  the  central  agency  for  the  supervision  and  direction  of 
(a)  the  disposition  of  all  claims  of  every  character  between  the 
United  States,  on  the  one  part,  and  any  foreign  State  or  Govern- 
ment, or  their  nationals,  on  the  other  part,  growing  out  of  or  in  any 
wise  connected  with  the  war;  and  (h)  the  disposition  of  all  prop- 
erty or  interest  in  property  of  whatever  kind  or  nature  belonging  to 
the  United  States,  acquired,  constructed,  or  manufactured  in  connec- 
tion with  or  incidental  to  the  war  and  now  located  beyond  its  terri- 
torial limits. 

Immediately  following  the  passage  of  the  act  of  March  2,  1919 
(supra),  the  Secretary  of  War  caused  to  be  issued  General  Orders, 
No.  40,*  designating  the  Commission,  already  created,  as  the  agency 
through  which  the  powers  granted  by  this  act  should  be  exercised  in 
so  far  as  they  related  to  dealings  Avith  foreign  Governments  or  their 
nationals,  with  the  exception  of  Canada. 

The  Commission  as  originally  formed  consisted  of  four  members, 
viz.,  Edwin  B.  Parker  (chairman).  Brig.  Gen.  Charles  G.  Dawes, 
Homer  H.  Johnson,  and  Henry  F.  Hollis.  The  organization  meet- 
ing of  the  Commission  was  held  in  Paris  on  March  17,  1919. 

On  July  26,  1919,  when  the  bulk  sale  to  France  was  practically 
consummated.  Gen.  Dawes  and  Mr.  Johnson  tendered  their  resig- 
nations, which  were  accepted.  Gen.  Dawes  returned  to  the  United 
States,  where,  after  his  demobilization,  he  resumed  his  duties  as 
president  of  the  Central  Trust  Co.  of  Chicago,  having  given  freely 
to  his  country  of  his  time  and  means  throughout  the  Avar.  Mr.  John- 
son joined  a  commission  created  by  the  peace  conference  to  study 
and  re])ort  on  conditions  in  Poland.  The  membership  of  the  Com- 
mission vcns  then  reduced  to  three,  and  Col.  J.  H.  Graham,  who  had 
for  sometime  past  been  acting  as  executive  officer  of  the  Commis- 
sion, Avas  made  a  member.  On  October  31,  1919,  Senator  Hollis  ten- 
dered his  resignation,  AA-hich  Avas  accepted,  and  the  vacancy  thus 
created  Avas  never  filled. 

Upon  the  organization  of  the  Commission,  Junius  G.  Adams, 
a  member  of  the  Asheville,  N.  C,  bar,  formerly  a  judge  advocate 
Avith  the  rank  of  major,  became  the  Commission's  executiA^e  secre- 
tary. He  attended  all  the  meetings  of  the  Commission  and  partici- 
pated in  the  deliberations,  prepared  the  minutes  of  all  official  pro- 
ceedings, and  organized  and  directed  the  activities  of  the  Commis- 
sion's clerical  staff.    He  continued  in  this  position  until  he  Avas  sent 


8  See  Appendix  III  for  text  of  General  Orders,  No.  24. 
*  See  Appendix  lA'  for  text  of  General  Orders,  No,  40. 


14  UNITED  STATES  LIQUIDATION   COMMISSION. 

by  the  Commission  to  Germany,^  when  he  was  succeeded  by  Lieut. 
Col.  Edward  T.  Noble. 

In  defining  its  policies,  the  Commission  made  it  clear  that  it  did 
not  propose  to  create  an  organization  to  supersede  such  existing 
agencies  of  the  American  Expeditionary  Forces  as  were  at  that  time 
discharging,  in  whole  or  in  part,  the  duties  falling  within  the  Com- 
mission's jurisdiction.  It  proposed,  rather,  to  supervise  and  direct 
such  activities  of  these  agencies,  acting  through  and  in  cooperation 
with  them,  creating  new  ones  or  supplementing  old  ones  only  where 
some  new^  development  made  such  action  necessary.  It  would  have 
been  impossible  for  the  Commission  to  have  created  in  Europe,  at 
that  time,  an  independent  civilian  organization  of  sufficient  size  to 
supersede  the  Army's  forces  and  to  carry  out  all  of  the  details  of 
the  work  for  which  the  Commission  was  responsible. 

With  the  wholehearted  co-operation  of  Gen.  Pershing,  of  Ma j.  Gen. 
Harbor d,  and  of  the  chiefs  of  the  several  services  of  supply  under 
him,  no  time  was  lost  in  taking  measures  to  harmonize  the  work  of 
the  Commission  Avith  that  of  the  various  Army  units,  and  in  perfect- 
ing an  organization  suitable  for  making  thorough  and  speedy  investi- 
gations looking  to  the  adjustment  of  claims  and  the  disposition  of 
stocks.  For  the  purpose  of  instructing  all  concerned  in  the  matter  of 
the  relation  of  the  Commission  to  the  several  agencies  of  the  Ameri- 
can Expeditionary  Forces,  (xeneral  Orders,  No.  18."  prepared  jointly 
by  the  chairman  of  the  Commission  and  Gen.  Harbord,  were  issued 
from  the  headquarters  of  the  Services  of  Supply. 

Under  the  plan  outlined  in  this  order,  the  Army  services  continued 
in  the  custody  of  all  property.  They  were  to  exhibit  it  to  pros- 
pective buyers  and,  whenever  sales  w-ere  made,  deliver  it  and  procure 
the  receipts.  The  General  Sales  agent  of  the  Services  of  Supply 
functioned  also  for  the  Commission,  negotiating  sales  subject  to  its 
approval.  The  several  services  of  the  Army  were  instructed  to  col- 
lect complete  data  on  all  claims  falling  within  their  respective  juris- 
dictions and  to  report  them  with  recommendations  to  the  Commis- 
sion through  the  Army  Finance  Officer.  The  process  of  paying  cur- 
rent or  other  regular  bills  and  accounts  through  the  usual  channels 
w^as  not  disturbed.  The  work  of  the  Division  of  Renting,  Requisi- 
tion, and  Claims,  so  ably  carried  on  by  Col.  Winship  and  his  staff, 
was  not  interfered  with. 

Regular  daily  meetings  were  held  by  the  Commission  for  the  trans- 
action of  business,  for  the  consideration  and  study  of  problems,  for 
receiving  and  acting  upon  reports,  and  for  hearing  and  deciding 
claims.    The  minutes  of  these  meetings,  carefully  indexed,  furnish  a 

5  See  p.  34  of  this  report. 

«  See  Appendix  V  for  text  of  A.  E.  F.  G.  C,  No.  18,  S.  O.  S.,  1919. 


UNITED  STATES  LIQUIDATION   COMMISSION.  15 

convenient  and  condensed  chronological  record  of  the  work  of  the 
Commission. 

On  Friday  morning  of  each  week  a  special  meeting  was  held  in  the 
office  of  the  chairman,  which  meeting  was  always  attended  by  the 
Commissioners,  by  the  General  Sales  Agent,  by  members  of  the  Com- 
mission's staff,  and  by  officers  of  the  Army  interested  in  the  par- 
ticular word  under  consideration.  The  work  relating  to  liquidations 
carried  on  by  the  various  services  w^as  reviewed  at  these  meetings, 
plans  for  each  ensuing  week  Avere  formulated,  problems  were  freely 
discussed,  information  was  sought  by  the  Commission,  and  opinions 
were  invited  and  frankly  expressed. 

The  Commission  established  an  Accounting  Section,  whose  func- 
tion was  to  co-ordinate  accounts  and  claims  in  favor  of  and  against 
the  various  Governments  with  which  the  Army  had  dealings.  This 
Accounting  Section  rendered  valuable  service  in  the  negotiations 
resulting  in  the  general  settlement  agreements  with  France,  Italy, 
and  Belgium,  and  also  in  the  settlements  and  negotiations  with 
Great  Britain.  It  has  also  been  of  considerable  assistance  to  the 
Commission  in  the  compilation  of  statistics  prepared  from  informa- 
tion furnished  by  the  various  Army  services. 

The  activities  of  the  Commission  divide  naturally  into  two  main 
groups:  (1)  Those  relating  to  sales,  and  (2)  those  relating  to  settle- 
ments and  adjustments  of  claims.  Because  of  the  location  of  stocks 
and  of  claimants,  these  groups,  in  turn,  divide  geographically.  The 
account  of  the  work  will  be  given  according  to  these  divisions. 


II.  SALES. 


SALES  TO  THE  REPUBLIC  OF  FRANCE. 

When  the  Commission  took  up  its  work,  it  found  over  a  million 
and  a  half  of  American  troops  in  Europe,  caring  for  American  prop- 
erty scattered  all  over  France,  over  England,  on  the  Khine,  and,  in 
limited  amounts,  in  Italy,  Belgium,  and  Spain — property  of  every 
kind  and  description :  installations  and  movables,  factories,  ware- 
houses, docks,  railroad  yards,  railroad  equipment,  motor  transport, 
telephone  and  telegraph  lines,  food,  clothing,  tobacco,  ammunition, 
guns,  machinery,  raw  materials.  Some  of  it  was  new,  some  of  it 
was  worn  out,  much  of  it  was  used. 

National  policy  demanded,  international  policy  demanded,  that 
these  troops  be  sent  home  without  delay.  Every  day  they  remained 
in  Europe  cost  a  huge  sum,  not  only  to  the  Nation  as  such  in  pay 
and  subsistence  and  in  the  loss  of  their  enormous  producing  capacity 
at  home,  but  in  personal  loss  to  the  individuals  because  of  delay  in 
resuming  their  accustomed  pursuits. 

The  docks,  factories,  assembling  plants,  and  other  installations 
were  constructed  on  land  belonging  to  some  150,000  separate  owners, 
giving  rise  to  unnumbered  claims  for  rents,  requisitions,  restorations, 
and  damages.  This  property  had  been  assembled  and  installed  under 
extreme  pressure,  for  immediate  and  temporary  use,  with  an  eye 
single  to  winning  the  war,  and  with  only  casual  reference  to  its 
dis-establishment.  Most  of  it  was  located  in  a  country  bled  white  in 
every  vein  by  more  than  four  years  of  war.  It  was  located  in  a 
country  whose  exchange  was  falling  on  every  market  in  the  world. 
It  was  located  in  a  country  the  traditions  of  whose  nationals  are 
those  of  careful  and  exacting  purchasers,  and  a  country  fully  aware 
of  its  financial  distress  and  consequent  consideration  due  it  in  solving 
its  problems  of  peace  by  the  peoples  associated  with  it  in  fighting 
the  battles  of  war.  But  it  was  located  in  a  country  filled  with  a  deep 
and  genuine,  and,  let  us  hope,  lasting  good-will  toward  America. 

At  the  threshold  of  these  labors  the  members  of  the  Commission 

examined  with  studied  care,  both  individually  and  collectively  and 

in  conference  with  the  Secretar}^  of  War,  the  problem  involving 

the  wisdom  of  the  United  States  selling  its  European  surplus  stocks 

16 


UNITED  STATES  LIQUIDATION   COMMISSION.  17 

abroad  or  of  transporting  them  to  America  for  sale.  Obviously 
tlie  installations  had  to  be  sold  in  France;  for,  if  they  had  been 
dismantled,  their  salvage  value  would  scarcely  have  covered  the  cost 
of  salvaging,  of  restoring  the  land,  and  of  settling  rental,  requisi- 
tion, and  damage  claims. 

The  economic  as  well  as  the  social  welfare  of  our  country  made 
the  demand  imperative  that  every  available  trans-Atlantic  vessel 
should  be  pressed  into  service  for  the  speedy  return  of  our  troops 
to  America.  Past  experience  had  proven  and  subsequent  experi- 
ence has  confirmed  that  it  would  have  been  impracticable  to  trans- 
port by  rail  to  the  ports,  within  any  reasonable  time,  these  immense 
stocks.  The  French  railroads  were  thoroughly  demoralized  b}^  the 
four  years  of  war  during  which  time  maintenance  had  been  reduced 
to  the  minimum;  while  additions,  betterments,  and  extensions  had 
been  entirely  lacking.  Consequently  congestion  in  rail  transporta- 
tion was  unprecedentedly  great  in  France. 

A  very  large  percentage  of  these  stocks,  manufactured  and  as- 
sembled under  pressure,  handled  and  re-handled  under  tremendous 
handicaps,  were  in  a  condition  and  of  a  character  which  clearly 
would  not  have  justified  the  cost  of  returning  them  to  America.  As 
our  troops  were  evacuating  France,  we  had  to  look  forward  to  the 
time  when  we  would  be  left  without  facilities  for  keeping  posses- 
sion of,  guarding,  handling,  delivering,  or  shipping  home  these 
goods.  It  was  clear  that  the  hungry,  cold,  and  industrially  de- 
moralized people  of  Europe  stood  in  crying  need  of  a  large  per- 
centage of  these  supplies — supplies  which  under  existing  conditions 
could  not,  as  a  whole,  be  advantageously  returned  to  America  at 
any  time,  and  such  part  of  them  as  might  justify  the  cost  of  han- 
dling and  transportation  could  hardly  be  held  in  France  until  con- 
ditions should  become  nearly  enough  normal  to  make  possible  their 
shipment.  It  was,  therefore,  after  the  most  careful  and  painstaking 
consideration,  and  after  prolonged  conferences  between  the  Secre- 
tary of  War  and  the  members  of  the  Commission,  that  the  con- 
clusion was  definitely  and  unanimously  reached  that  it  was  to  the 
interest  of  the  United  States  and  the  duty  of  the  United  States  to 
sell  the  major  part  of  these  European  surpluses  in  Europe. 

But  there  were  several  not  inconsiderable  obstacles  in  the  way  of 
a  speedy  and  businesslike  disposition  of  these  stocks  even  in  Europe. 
France  really  needed  and  wanted  many  of  them.  Belgium  wanted 
and  needed  some  of  them.  The  so-called  "liberated  countries"  of 
Central  Europe  and  the  "Near  East  were  in  dire  need  of  all  they 
could  get  in  the  way  of  foodstuffs,  clothing,  medical  supplies,  and 
transportation  equipment.  But  none  of  these  countries  were  in  a 
position  either  to  pay  cash  or  to  purchase  on  short-time  credits. 
183176—20 2 


18  UNITED  STATES  LIQUIDATION   COMMISSION. 

The  exchange  of  every  one  of  them  was  far  below  normal  and  was 
declining  rapidly. 

The  first  problem,  however,  which  confronted  the  Commission 
was  that  of  determining  just  what  it  had  for  sale  and  what  would 
be  reasonable  selling  prices.  The  task  of  preparing  comprehensive 
but  condensed  working  inventories,  classified  and  summarized  within 
a  compass  small  enough  for  practical  use,  setting  forth  the  quantities, 
nature,  and  condition  of  these  stocks,  their  cost  laid  down  in  France, 
and  their  probable  utilization  or  sale  value,  was  one  of  immense 
proportions.  This  difficulty  Avas  tremendously  enhanced  by  the  facts 
that  (1)  the  stocks  had  been  acquired  from  many  different  sources, 
(2)  they  were  located  in  several  hundred  places,  (3)  their  quantity 
and  condition  was  being  reduced  by  constant  use,  and  (4)  their 
value  was  too  often  diminished  by  handling,  natural  deterioration,  or 
by  unavoidable  exposure  or  disuse. 

After  careftil  study  and  conferences  with  the  Army  officials  and 
especially  with  the  chiefs  of  each  of  the  services  and  the  members  of 
their  staffs,  the  Commission  adopted  a  plan  and  prescribed  a  form  for 
the  compilation  of  inventories  of  personal  or  movable  stocks  (as 
distinguished  from  installations,  which  were  separately  inventoried) 
under  18  distinct  categories  or  classes,  each  of  which  categories  was 
in  turn  subdivided.^ 

The  task  of  compiling  these  inventories,  summarizing  and  classi- 
fying them,  with  a  view  to  showing,  so  far  as  practicable,  the  relative 
conditions  of  the  various  articles  was  one  bristling  with  difficulties, 
especially  as  during  all  of  this  time  the  American  Expeditionary 
Forces  was  a  "  going  concern."  The  depots  were  necessarily  drawn 
upon  for  current  supplies  for  the  troops  in  France,  for  return  of 
materials  and  equipment  to  the  United  States,  and  for  supplying 
and  equipping  the  American  forces  in  Germany.  New  stocks  were 
coming  in  from  time  to  time  as  agreements  in  cancellation  of  con- 
tracts of  purchase  or  manufacture  were  reached  and  small  deliveries 
taken  in  liquidation.  Stocks  were  constantly  flowing  into  the  main 
depots  from  smaller  posts  and  outlying  districts  as  these  were  evacu- 
ated. For  the  compilation  of  these  inventories  the  Commission  was 
compelled  to  rely  upon  the  Army,  which  held  the  custody  of  the 
stocks.  The  Army  had  to  rely  upon  civilians  who  had  come  to 
France  to  fight,  not  to  engage  in  Army  clerical  work — men  who  hav- 
ing won  a  glorious  victory  had  one  thought  uppermost  in  their 
minds — to  return  home.  The  Army  had  a  personnel  constantly  shift- 
ing and  changing,  due  to  Avithdrawals  for  return  to  the  United  States, 
to  civilian  life  and  interests.  But  it  is  believed  that  each  service  did 
its  best,  and,  on  the  whole,  did  well,  considered  in  the  light  of  all  of 

'  See  Appendix  VI  for  list  of  the  18  "  Categories,"  with  the  classes  of  stocks  ander 
each. 


UNITED  STATES  LIQUIDATION   COMMISSION.  19 

rlie  circumstances.  It  is  interesting,  parenthetically,  to  note  here  that 
neither  the  British  nor  the  French  services  have  even  yet  compiled  a 
general  inventory  of  their  surplus  stocks. 

The  problem  of  valuing  the  inventoried  stocks  was  fraught  with 
many  difficulties,  Avhich  had  the  most  painstaking  consideration  of 
the  Commission  and  its  advisors.  Clearly,  cost,  condition,  possible 
usefulness,  supply  and  demand  were  the  principal  factors  for  consid- 
eration in  determining  selling  value.  But  cost  varied  greatly  on  ac- 
count of  the  multiplicity  of  sources  of  supply  of  almost  an  infinite 
number  of  articles,  and  the  unknown  'and  necessarily  estimated  ex- 
penses of  transportation  and  handling.  Condition  varied  with  use, 
extent  of  handling,  care,  action  of  the  elements,  etc.  Utilization 
value  is  necessarily  indefinite,  depending  on  demand  and  supply  and 
the  location  of  the  stocks  and  transportation  facilities,  on  whether 
the  stocks  are  complete  or  broken,  balanced  or  unbalanced,  and  on 
numerous  other  factors.  As  the  work  of  preparing,  classifying,  and 
summarizing  the  inventories  by  categories  progressed,  the  problems 
of  valuing  these  stocks  were  studied  intensively  and  continuously 
by  the  Commission  and  its  advisors  and,  at  the  same  time,  by  the 
French  authorities,  with  whom  the  Commission  was  negotiating  for 
their  sale. 

The  work  of  supervising  for  the  Commission  the  compilation  of 
inventories,  according  to  categories,  was  intrusted  to  Col.  J.  H. 
Graham,  who  had  already,  in  the  Army  Engineer  Corps,  abundantly 
demonstrated  his  ability,  thoroughness,  and  trustworthiness.  It  took 
a  strong  force,  working  continuously  and  under  constant  pressure, 
more  than  six  weeks  to  complete  these  inventories  and  to  sunmiarize 
and  classify  them.  As  the  work  progressed,  the  Commission,  with 
the  assistance  of  Col.  Graham,  the  chiefs  of  the  services  and  experts 
(h'awn  from  each  service,  carefully  stijdied  the  inventories,  took  into 
account  and  discussed  every  known  factor  of  value,  giving  to  each 
factor  such  weight  as  seemed  proper,  and  fixed  and  determined  what 
they  believed  to  be  reasonable  selling  values.  Actual  war  costs,  in- 
cluding transportation  and  handling,  were  naturally  the  starting 
point  and  one  of  the  determining  factors.  Pre-war  normal  costs  were 
considered  and  quite  frequently  these  were  found  too  low.  As  these 
stocks  Avere  assembled,  shipped,  handled,  and  stored  under  conditions 
of  abnormal  pressure,  their  depreciation  was  in  many  instances  ab- 
normally great.  Many  of  the  stocks  were  designed  for  war  uses  only 
and  had  a  relatively  small  commercial  value.  Both  France  and  Eng- 
land had  large  surpluses  of  many  of  the  materials,  which  supple- 
mented by  our  stocks  in  Europe,  were  more  than  the  markets  of  the 
world  could  readily  absorb  for  several  years  to  come. 

All  of  these  facts,  and  many  other  incidental  ones,  were  taken  into 
account  in  arriving  at  the  "estimated  present  values"  or  "  utiliza- 


20  UNITED  STATES  LIQUIDATION   COMMISSION. 

tion  values  "  of  these  stocks  by  cateo^ories.  These  were-  intended  to 
represent  prices  at  which  they  could,  when  classified,  assorted,  and 
conditioned,  be  sold  in  France  at  wholesale.  From  the  a£:greofate 
amount  this  reached  it  was  obviously  proper  to  make  liberal  deduc- 
tions to  cover  the  cost  of  merchandizini^.  labor,  storage,  insurance, 
interest,  and  other  overhead  expenses.  The  fact  was  taken  into  ac- 
count that  there  will  inevitably  be  a  large  deterioration,  not  only 
in  the  quality  of  the  stocks,  but  also  in  their  market  price  before  all 
of  them  can  possibly  be  disposed  of.  The  Commission  took  into 
account  the  risk  of  loss  by  fire,  by  theft,  and  by  other  causes.  They 
took  into  consideration  the  fact  that  the  stocks  were  widely  scat- 
tered, had  not  been  assembled  for  commercial  purposes,  and  were 
not  in  the  hands  of  a  going  concern,  equipped  to  replenish  them 
from  time  to  time  and  market  them  to  the  best  advantage.  Giving 
due  allowance  to  all  of  these  considerations,  it  was  concluded  that 
a  fair  deduction  from  the  aggregate  "estimated  value"  of  these 
stocks  for  the  purposes  of  a  bulk  sale  would  be  25  per  cent.  On 
this  basis  the  stocks  and  installations  were  yalued,  as  of  July  19, 
1919,  at  $562,23(),800.02,«  and  this  is  the  value  which  the  Commis- 
sion had  in  mind  when  it  entered  upon  the  final  stage  of  its  negotia- 
tions with  the  representatives  of  France,  which  resulted  in  the  con- 
summation of  the  "  bulk  sale." 

In  the  meantime  the  Commission,  beginning  with  interviews  held 
in  March,  had  been  diligent  in  pressing  its  negotiations  with  the  rep- 
resentatives of  the  French  Government  with  a  view  to  concluding  a 
sale  or  to  developing  the  fact  that  one  could  not  be  made.  M.  Paul 
Morel,  the  Sous-Secretaire  d'Etat  aux  Finances  pour  Liquidation  des 
Stocks  (the  minister  particularly  charged  with  the  liquidation  of 
war  stocks),  had  been  designated  by  the  French  Government  as  its 
representative  to  deal  with  the  Commission  in  matters  pertaining  to 
the  contemplated  purchase.  Numerous  conferences  were  held  with 
him.  At  a  long  meeting  on  April  7,  it  was  agreed  in  principle  that 
France  should  purchase  all  of  the  American  installations  at  a  price 
to  be  agreed  upon,  assuming,  as  part  of  the  price,  the  payment  of  all 
claims  for  rents,  requisitions,  restorations,  damages,  and  other 
charges  against  the  United  States  Avhich  had  arisen  against  these 
properties. 

The  disposition  of  the  installations  was  the  first  problem  under- 
taken by  the  Commission.  Immediately  after  its  creation  and  before 
the  chairman  left  the  United  States,  a  cable  was  sent  directing  the 
preparation  of  an  inventory  of  all  American  Expeditionary  Forces' 

8  See  Appendix  VII,  Chart  A,  which  shows  summaries  of  values  by  categories  on 
which  the  final  negotiations  with  France  were  based.  The  difference  between  column  F 
and  column  H  is  represented  by  a  series  of  differences  in  quantities.  These  reductions 
are  shown  by  services  on  Chart  B,  Appendix  VIII.  They  are  calculated  also  by  cate- 
gories, and  represent  sales  and  other  dispositions  since  the  inventories  were  made. 


UNITED  STATES  LIQUIDATION   COMMISSION.  21 

installations  in  France.  A  very  capable  committee  of  officers  from 
the  Engineering  Corps,  with  Col.  J.  H.  Graham  as  chairman,  was 
promptly  selected  and  undertook  this  work.  Later  Brig.  Gen.  Jad- 
win  became  chairman  of  the  committee  and  the  500-page  report  which 
it  prepared  is  familiarly  knoAvn  as  the  "Jadwin  Report."  Following 
the  conference  of  April  7,  a  copy  of  the  Jadwin  Report,  showing 
"  war  costs  "  and  estimated  "  normal  costs,"  item  by  item,  of  all  the 
American  installations  in  France,  was  given  to  M.  Morel,  who  im.me- 
diately  arranged  to  have  a  large  corps  of  his  engineers  make  personal 
inspections  and  reports  on  these  installations,  checking  against  the 
Jadwin  Report.  The  methods  adopted  by  the  French  in  valuing  this 
property  differed  in  several  respects  from  those  adopted  by  the  Jad- 
win committee.  In  order  to  adjust  and  reconcile  these  differences, 
the  Commission  called  to  its  aid  Col.  J.  H.  Graham,  who,  as  already 
pointed  out,  had  a  large  hand  in  the  preparation  of  the  Jadwin  Re- 
port. He  organized  a  staff  and  placed  an  American  representative 
with  each  of  the  units  of  French  engineers  sent  out  by  M.  Morel  to 
make  a  first-hand  study  and  report  on  the  condition  and  value  of 
the  installations.  When  the  reports  were  completed.  Col.  Graham's 
conmiittee  held  a  series  of  meetings  covering  a  period  of  more  than 
two  weeks  with  the  committee  of  French  engineers  at  which  notes 
V,  ere  compared,  adjustments  made,  and  differences  reconciled. 

The  Jadwin  Report  showed  total  war  costs  of  all  American  installa- 
tions in  France,  including  transportation  and  handling  of  material, 
soldier  labor,  and  all  other  elements,  at  $165,661,000  and  normal  costs 
of  the  same  properties  at  $81,543,000.  The  joint  American  and 
French  committee,  after  making  deductions  for  the  estimated  liabili- 
ties assumed  by  France  for  rents,  requisitions,  restorations,  and  dam- 
ages, placed  the  net  present  estimated  value  of  all  American  installa- 
tions in  France  at  $39,256,500. 

In  comparing  these  figures  and  judging  their  significance,  one  must 
bear  in  mind  that  these  installations  were  of  every  conceivable  type — 
barracks,  camps,  hospitals,  warehouses,  machine  shops,  docks,  tele- 
phone and  telegraph  lines,  railroad  yards,  etc.  They  had  been  con- 
structed on  land  for  the  most  part  requisitioned  for  war  use  and  be- 
longing to  approximately  a  hundred  and  fifty  thousand  separate 
owners.  Most  of  these  owners  had  claims  against  the  United  States 
for  rents,  for  requisitions,  for  damages,  for  restorations,  for  damages 
to  crops,  for  removal  of  vineyards,  orchards,  trees,  and  structures, 
for  building  roads,  putting  in  drainage  systems,  etc.  Our  right  to 
occupy  these  lands  terminated  with  the  war.  We  had  taken  them 
over  under  obligations  imposed  by  law  to  return  the  lands  to  their 
owners  in  the  condition  in  which  we  had  found  them.  While  the 
French  Government,  under  its  power  of  eminent  domain,  could  ac- 
quire or  permit  us  to  acquire  these  properties  for  war  use,  the  French 


22  UNITED  STATES  LIQUIDATION   COMMISSION. 

law  does  not  permit  the  exercise  of  this  power  in  our  behalf  for  ac- 
quiring permanent  titles.  In  fact,  the  French  law  does  not  permit 
a  foreign  sovereign  power  to  acquire  a  permanent  title  to  real  estate 
within  its  domain  except  by  courtesy  for  the  use  of  diplomatic  repre- 
sentatives. The  French  Government,  however,  could  acquire  per- 
manent title  by  eminent  domain  to  such  of  these  properties  as  it  might 
wish  to  preserve  or  dispose  of  in  their  present  condition.  Manifestly, 
therefore,  our  position  as  party  to  a  bargain  was  one  of  extreme  dis- 
advantage. We  had  either  to  sell  to  the  French  Government  or  to 
tear  down  and  salvage  the  constituent  materials. 

Under  a  salvage  program  many  of  the  properties  would  b.ave 
turned  out  to  be  distinct  liabilities  instead  of  assets,  especially  as  we 
would  have  been  required,  at  a  ver}^  heavy  overhead  ex})ense.  to. have 
negotiated  and  settled  a  very  large  number  of  claims  for  rents,  dam- 
ages, and  restorations.  It  is  estimated  that  it  would  have  required  the 
labor  of  40,000  men  for  a  period  of  6  or  8  months  to  dismantle 
these  installations  and  salvage  the  constituent  materials.  This  task 
would  have  fallen  upon  our  Army  Engineer  Corps,  for  competent 
French  labor  was  not  obtainable.  Under  agreement  reached  with 
M.  Morel,  however,  the  selling  value  of  each  piece  of  property  was 
arrived  at,  not  by  considering  its  salvage  value  to  the  United  States, 
but  by  taking  into  account  every  factor  entering  into  the  determina- 
tion of  the  net  "  utilization  value  "  of  such  piece  of  property  to  the 
French  Government.  On  the  whole,  it  is  believed  that  the  result 
obtained  was  a  very  fair  one,  alike  to  America  and  to  France. 

While  these  studies  with  respect  to  the  value  of  the  fixed  prop- 
erty were  in  process,  the  Commission  pressed  upon  M.  Morel  and 
the  other  French  representatives  the  plan  which  it  had  been  develop- 
ing for  selling  to  France  the  major  portion  of  the  movable  or  \)ev- 
sonal  American  Expeditionary  Forces'  property  in  France.  At  first 
the  French  representatives  suggested  that  they  might  select  such  of 
these  stocks  as  they  could  use  to  advantage  and  undertake  to  agree 
with  the  Commission  on  a  price  and  terms  of  payment.  This  })lan 
would  have  left  on  our  hands  vast  stocks  of  a  character  and  condi- 
tion such  that  their  return  to  America  would  not  have  been  justified, 
and  at  the  same  time  they  would  have  been  stocks  of  which  France 
and  England  were  carrying  large  surpluses.  Our  stores  would  have 
been  left  creamed  off  and  more  unsalable  than  they  were  at  the  start. 
The  Commission  urged  upon  the  French  representatives  that  as  all 
these  stocks  were  on  their  soil  and  many  of  them  located  where  they 
were  greatly  needed  and  as  great  quantities  of  them  could  be  used 
to  advantage  in  the  reconstruction  of  the  devastated  regions,  France 
was  in  a  most  favorable  position  as  buyer  and,  under  the  circum- 
stances, it  was  her  duty  to  buy  them  in  bulk,  taking  the  bad  with  thib 
good.     The  Commission  desired  onlv  to  reserve  a  sufficient  auantitv 


UNITED  STATES  LIQUIDATION   COMMISSION.  23 

of  supplies  and  equipment  for  the  use  of  our  Army  while  in  Europe, 
of  foodstuffs,  clothing,  and  medical  supplies,  to  satisfy  the  pressing 
needs  of  the  "liberated  nations,"  and  to  cover  such  sales  as  were 
being  negotiated  in  Belgium,  Spain,  and  elsewhere. 

In  response  to  this,  M.  Morel  submitted  three  alternative  proposals : 
(1)  France  would  sell  these  stocks  as  agent  of  the  United  States, 
accounting  without  profit  for  the  proceeds;  (2)  France  would  take 
the  stocks  at  a  fixed  price,  sell  them,  and  if  the  net  proceeds  should 
exceed  the  fixed  price,  would  account  to  America  for  the  balance; 
but  if  the  net  proceeds  should  be  less  than  the  fixed  price,  America 
should  pay  to  France  the  difference:  or  (3)  France  would  purchase 
the  stocks  outright  at  a  fixed  price.  The  third  proposal  was  con- 
sidered by  the  Commission  as  the  only  feasible  one  and  was  accepted 
by  it  in  principle. 

While  these  negotiations  were  in  progress,  the  Commission  was  at 
the  same  time  using  every  agency  at  its  command  to  develop  markets 
and  to  press  sales  outside  of  France.  Numerous  and  extensive  sales 
were  made  to  the  various  "  liberated  nations,"  to  relief  societies,  and 
to  other  associations  and  to  individuals.  On  May  6,  the  principle 
of  the  "  bulk  sale  "  to  France  was  agreed  upon,  subject  to  a  con- 
clusion between  the  parties  on  price  and  terms  of  payment;  and  it 
was  understood  that  from  that  day  forward  all  sales  made  by 
America  to  France  should  be  billed  in  the  usual  way  and  be  paid  for 
by  France,  should  the  "bulk  sale"  miscarry,  but  that  such  bills 
should  be  cancelled  by  America,  if  the  "  bulk  sale  "  was  consummated. 
It  was  further  agreed  that  the  Commission  might  continue  to  make 
sales  to  the  "  liberated  nations,"  to  Belgium,  to  Spain,  and  to  others, 
but  that  all  proposals  for  such  sales  should  be  submitted  to  M.  Morel 
in  order  that  he  might  keep  fully  informed  concerning  the  extent 
and  condition  of  the  stocks  on  which  his  men  were  busilj^  engaged 
calculating  a  price.  It  was  in  accord  with  this  understanding  that 
large  sales  were  made  for  export  out  of  France  between  the  6th  day 
of  May  and  the  25th  day  of  July,  when  the  terms  of  the  "  bulk  sale  " 
to  France  were  finally  settled. 

Notwithstanding  the  greatest  diligence  on  the  part  of  the  Com- 
mission in  pressing  its  negotiations,  progress  was  too  slow  to  keep 
pace  with  the  demand  for  the  rapid  withdrawal  of  troops,  especially 
from  the  advance  sectors.  Therefore,  on  May  1,  an  agreement  was 
entered  into  between  the  Commission  and  the  French  Government 
under  the  terms  of  which  the  American  Expeditionary  Forces  could 
withdraw  their  troops  from  any  particular  zone  in  France,  and,  by 
giving  10  days'  notice  to  the  French  commander  in  such  zone,  deliver 
to  the  French  on  joint  inventories  all  American  stocks  located  in 
the  *zone.  These  joint  inventories  set  forth  the  stocks,  showing 
"  kind,"  "  quantity,"  and  "  percentage  of  condition  as  compared  to 


24  UNITED  STATES  LIQUIDATION   COMMISSION. 

new,"  and  stipulated  that  the  stocks  were  held  by  France  without 
expense  to  America  and  subject  to  the  directions  of  the  Commis- 
sion.   They  were  signed  by  French  and  American  officers.^ 

This  procedure  did  not  apply  to  18  of  the  largest  depots  which 
were  retained  in  the  custody  of  America  until  the  stocks  were  defi- 
nitely sold.  This  plan  made  it  possible  to  continue  the  homeward 
movement  of  troops  without  interruption,  and  made  it  unnecessary 
for  us  to  hold  thousands  of  men  in  France  as  custodians  of  these 
stocks  until  they  could  be  delivered  under  the  terms  of  the  sale. 

During  all  of  this  time  the  work  on  the  inventories  was  being 
pressed  forward.  As  soon  as  the  summaries  by  categories  could 
be  finished  for  any  service  they  would  be  handed  to  M.  Morel,  who, 
through  his  representatives,  would  use  them  as  a  basis  for  check- 
ing and  inspecting  the  stocks.  While  this  work  was  going  on.  it 
became  evident  that  the  French  were  very  hesitant  about  taking  the 
whole  body  of  materials  in  a  bulk,  for  it  was  becoming  clear  to 
them  that  the  French  Government  already  possessed  stocks  of  cer- 
tain categories  in  excess  of  the  amount  which  France  could  readily 
absorb  for  some  time  to  come.  Unfortunately,  these  were  chiefly 
categories  of  materials  whose  return  to  the  United  States  could  not 
be  justified  and  which  were  at  the  same  time  a  drug  on  the  markets 
of  Europe,  such  as  barbed  wire,  trench  materials,  ammunition,  field 
cooking  utensils,  gas  materials,  etc. 

Finally,  after  much  pressure,  on  July  2,  M.  Morel  submitted  \u< 
first  bid,  viz,  1,500,000,000  francs.  It  was  submitted  orally  in  con- 
ference and  the  reply  was  immediately  made  that  the  Commission 
could  not  give  the  bid  serious  consideration.  Numerous  prolonged 
conferences  followed.  In  order  that  there  might  be  no  misunder- 
standing of  the  Commission's  position,  the  chairman  wrote  at  length 
to  M.  Morel,  on  July  7,  a  letter  the  spirit  of  which  can  be  gathered 
from  the  following  excerpt. 

"After  the  sacrifices,  which  can  not  be  measured  in  terms  of  dollars,  which  have 
been  made  by  both  of  our  peoples,  it  would  be  criminal  stupidity  on  the  parts 
of  the  representatives  of  both  our  Governments  to  fail  to  agree  on  the  dis- 
position to  be  made  of  the  surplus  war  supplies  remaining  on  French  soil.  This 
Commission  sincerely  hopes  that  it  will  not  be  forced  to  sell  for  shipment  out 
of  France  anything  that  the  French  people  really  need  or  can  utilize  to  advan- 
tage, and  we  are  therefore  not  only  willing  but  anxious  to  make  to  the  Gov- 
ernment of  France  a  price  for  this  property  which  will  be  attractive  to  it  and 
to  extend  credit  for  the  entire  purchase  price. 


8  See  Appendix  IX  for  form  of  receipt  given  by  the  French  Army  to  the  American 
Army  upon  the  turning  over  of  stocks  before  the  sale.  The  inventory  referred  to  had  the 
following  headings :  "  Article,"  '*  Unit,"  "  Quantity,"  "  Percentage  of  condition  as  com- 
pared to  new  "  ;  and  was  initialed  on  each  page  by  both  of  the  signing  oflBcei's.         • 


UNITED  STATES  LIQUIDATION   COMMISSION.  25 

"  May  I  not  in  conclusion  remind  j-ou  tliat,  as  the  treaty  of  peace  with  Germany 
has  been  signed  and  measures  have  been  taken  by  your  Government  and  ours, 
together  with  their  associates,  to  insure  a  lasting  peace,  and  as  the  American 
Expeditionary  Forces  are  being  very  rapidly  withdrawn  and  returned  to  their 
homes,  it  is  imperative  that  the  surplus  war  supplies  belonging  to  our  Govern- 
ment, in  France,  should  be  speedily  disposed  of,  if  not  to  the  French  Government, 
then  to  others  who  urgently  need  and  are  seeking  to  acquire  them,  to  the  end 
that  they  may  be  promptly  and  fully  utilized  to  bring  back  a  measure  of  pros- 
perity to  the  suffering  peoples  of  the  world." 

Xo  good  purpose  could  be  accomplished  by  showing  here  in  detail 
the  course  of  the  negotiations  during  the  succeeding  three  weeks. 
They  were  carried  on  not  only  by  the  Commission  and  M.  Morel 
but  by  M.  Tardieu,  Commandant  Oppenheim,  Commandant  Var- 
aigne,  and  numerous  other  representatives  of  the  French  Govern- 
ment. Besides  the  question  of  price,  the  question  of  the  currency  in 
which  the  French  obligation  should  be  stated,  was  most  earnestly 
debated  between  the  parties.  The  French  representatives  insisted 
that  the  purchase  price  should  be  stated  and  paid  in  francs,  while 
the  Commission  declined  to  consider  any  offer  not  expressed  in 
dollars.  M.  Tardieu,  after  conferring  with  the  French  treasury, 
proposed  that  the  purchase  price  might  be  stated  in  dollars,  but 
that  a  condition  should  be  added  to  the  eftect*  that  if  the  cost  to 
France  of  finally  discharging  the  indebtedness  sihould  be  more  than 
5.18  francs  per  dollar,  such  excess  should  be  borne  equally  by 
France  and  the  United  States.    This  proposition  was  declined. 

On  July  19  the  following  proposal  was  submitted  by  the  French 
representatives : 

1.  France  should  pay  five  years  after  date  2,035,000,000  francs. 

2.  France,  in  her  own  way,  should  proceed  to  sell  the  American 
stocks  and,  after  deducting  the  expenses,  divide  equally  with  the 
United  States  any  balance  exceeding  the  price  named. 

In  response  to  this  proposal  the  chairman  expressed  the  following 
views : 

1.  France  would  not  wish  to  dispose  of  these  stocks  on  a  strictly 
business  basis,  nor  would  she  be  justified  in  so  doing,  but  she  would 
desire  to  use  them,  to  a  great  extent,  in  connection  with  the  rehabilita- 
tion of  her  devastated  regions,  at  prices  and  on  terms  which  only 
France  could*  afford  to  extend  to  her  nationals. 

2.  It  would  be  practically  impossible  for  France  to  keep  these 
stocks  segregated  from  her  own  property  of  the  same  class,  and  thus 
impossible  to  make  a  separate  accounting. 

3.  The  plan  seemed  to  contain  the  germs  of  controversy  and  fric- 
tion which  might  in  the  end  cost  the  two  Governments  more  than 
the  value  of  the  property  involved. 

4.  A  definite,  final,  complete,  and  unconditional  sale,  leaving  be- 
hind no  loose  ends  calculated  to  breed  trouble,  was  most  desirable. 


26  UNITED  STATES  LIQUIDATION   COMMISSION. 

Finally,  at  a  prolonged  conference  held  on  July  24,  a  tentative 
agreement  was  reached  on  terms  snbstantialh^  those  contained  in  the 
final  bulk  sale  contract.  The  four  members  of  the  Commission,  as 
well  as  Col.  Graham,  participated  in  the  discussion  and  the  con- 
sideration of  this  tentative  agreement,  and  the  Commission  "unani- 
mously voted  to  authorize  and  direct  the  chairman  to  prepare  and 
execute  in  the  name  and  on  behalf  of  the  commission,  the  contract 
which  became  the  agreement  for  the  bulk  sale.^*' 

Under  this  contract,  dated  August  1,  1919,  the  consideration  mov- 
ing from  America  is :  All  property — real,  personal,  or  mixed,  without 
guaranty  of  quantity,  qualit}^,  or  condition — belonging  to  the  United 
States  War  Department  and  located  within  France  on  that  date ;  save 
and  exceft  (1)  all  animals;  (2)  property  otherwise  contracted  to  be 
sold  and  valued  at  $77,265,597.83;  (3)  the  equipment  of  individual 
soldiers  and  military  units  returning  home;  (4)  other  military  equip- 
ment to  be  returned  to  the  United  States,  valued  at  $15,000,000;  (5) 
equipment  and  supplies  for  American  forces  so  long  as  they  remain  in 
France,  of  the  estimated  value  of  $4,000,000;  (6)  Ked  Cross  supplies 
valued  at  $10,000,000,  with  agreement  by  France  to  re-sell  to  America, 
upon  demand,  further  Red  Cross  material  at  cost  to  France." 

lender  this  contract  the  considerations  moving  from  France  are : 
(1)  $400,000,000  in  lO-year  5  per  cent  bonds,  with  semi-annual  in- 
terest from  August  1,  1920;  (2)  the  assumption  by  France  of  all 
rents  for  installations  accruing  after  August  1,  1919,  and  the  agree- 
ment of  France  to  hold  America  harmless  against  all  claims  of  every 
nature  whatever  arising  out  of  American  occupation  and  use  of  such 
installations  and  lands;  (3)  the  waiver  by  France  of  all  claims  what- 
soever for  taxes  or  customs  duties  on  properties  imported  into  France 
and  sold  since  April  6,  1917. 

Most  of  the  property  which  the  Commission  sold  in  France  was 
brought  in  without  the  payment  of  import  duties.  Until  this  con- 
tract was  signed  the  French  Government  had  never  relinquished  its 
right  to  claim  the  payment  of  such  duties,  though  the  point  was 
vigorously  pressed,  both  by  the  Commission  and  by  the  representa- 
tives of  the  British  Government  in  France,  that  the  salvaging  of 
surplus  war  stocks  was  an  incident  of  the  war  and  as  such  they 
could  not  be  held  subject  to  import  duties.  The  French  position  on 
this  point  was,  however,  a  strong  one.     It  was  supported  by  a  preced- 

10  See  Appendix  X  for  (1)  a  copy  of  the  bulk  sale  contract  as  signed;  (2)  the  French 
law  of  Oct.  21,  1919,  ratifying  the  sale;  (S)  the  letter  of  transmittal  of  Aug.  4.  1919, 
and  (4)  the  supplement  to  the  letter  of  transmittal,  dated  Aug.  11.  1919. 

11  All  adjustments  arising  under  these  reservations  or  any  of  the  other  terms  of  this 
bulk  sale  contract  have  been  made  by  the  Commission  and  the  French  Government  and  are 
merged  in  the  contract  of  general  settlement  dated  Nov.  25,  1919,  hereinafter  referred  to, 
so  that  this  bulk  sale  contract  is  now  a  completed  transaction. 


UmTED  STATES  LIQUIDATIOl!^   COMMISSION.  27 

ent  set  by  the  United  States  Government  in  dealing  Avith  the  siir- 
phis  stocks  left  in  the  Philippine  Islands  at  the  close  of  the  Spanish- 
American  War,  the  usual  customs  duties  having  been  paid  on  such 
stocks.  The  Commission  had  the  inventories  studied  in  connection 
with  the  French  tariff  schedules,  and  it  was  found  that  $150,000,000 
was  a  conservative  estimate  of  the  aggregate  customs  duties,  payable 
under  the  normal  rules,  for  all  of  our  stocks  in  France.  This  claim 
was  given  weight  in  fixing  the  final  purchase  price  of  $400,000,000. 

The  Avisdom  of  making  this  bulk  sale  has  been  amply  demon- 
strated by  subsequent  developments,  particularly  by  the  experience 
of  the  British  (Tovernmeut.  The  course  pursued  by  this  Commission 
was  to  promptly  sell  in  large  blocks  what  could  be  so  sold  to  advan- 
tage, and  then  sell  the  remainder  in  bulk  to  France.  Notwith- 
standing the  fact  that  the  British  war  stocks  were  so  located  in 
France  that  it  was  unnecessary  to  ship  them  exceeding  200  miles 
both  by  rail  and  water  to  reach  central  points  in  England,  and  Great 
Britain  was,  therefore,  not  confronted  with  the  problem  of  long- 
distance hauls  on  overcrowded  French  railroads  and  a  3,000-mile 
ocean  voyage  in  order  to  reach  her  home  markets ;  the  British  authori- 
ties decided  that  it  was  advisable  for  Great  Britain  to  consummate  a 
bulk  sale  of  their  war  stocks  in  France,  and  began  negotiations  with 
the  French  authorities  to  this  end  during  the  time  the  negotiations 
for  the  bulk  sale  of  the  American  stocks  were  in  progress.  It  is 
reported  that  these  negotiations  are  still  pending.  The  cost  of  hold- 
ing, ffuardins:,  and  caring  for  this  immense  war  stock  has  been  tre- 
mendous,  and  the  percentage  of  depreciation  from  natural  causes, 
exposure,  theft,  and  general  deterioration  will  amount  to  a  very  sub- 
stantial part  of  their  original  value.  These  unsold  stocks  are  of  no 
benefit  to  anyone  and  their  value  is  constantly  shrinking. 

The  English  press  has  severely  arraigned  its  Government  for  not 
folloAving  the  example  of  America  in  disposing  of  these  stocks :  and. 
while  disclaiming  any  intention,  even  inferentially,  of  joining  in  such 
criticism,  we  feel,  in  the  light  of  subsequent  events,  that  our  Gov- 
ernment has  been  fortunate  in  the  policy  of  expedition  which  it 
pursued. 

From  the  point  of  view  of  the  Commission,  this  French  bulk  sale 
(1)  accomplished  a  speedy  disposition  of  the  stocks,  allowing  the 
American  troops  to  return  home  promptly;  (2)  it  relieved  America 
of  the  trouble-breeding  task  and  of  the  enormous  overhead  expense 
of  otherwise  disposing  of  the  irregular,  unbalanced,  and  rapidly 
deteriorating  stocks  located  3,000  miles  from  home;  (3)  it  relieved 
America  of  the  French  claim  for  customs  duties  on  these  and  other 
stocks  in  France:  (4)  it  relieved  America  of  many  thousand  claims 


28  UNITED  STATES  LIQUIDATION   COMMISSION. 

of  French  nationals,  claims  which  would  have  arisen  for  many  years 
to  come,  the  settlement  of  w^hich  would  have  c6st  vast  sums  and 
which  would  likely  have  been  an  endless  source  of  bitterness  between 
the  two  peoples;  (5)  it  has  left  America  with  a  "clean  slate"  and 
has  eliminated  countless  opportunities  for  annoying  controversies; 
(6)  it  has  afforded  America  an  opportunity  of  helping  France  to 
help  herself  in  a  manner  not  to  offend  the  dignity  of  that  nation, 
inasmuch  as  the  need  of  and  value  to  France  of  these  stocks  in  France 
is  much  greater  than  is  the  need  of  them  or  their  value  to  the 
United  States,  and  finally;  (7)  it  has  given  America  a  very  fair 
money  return. 

SALES  FOR  USE  OF  "  LIBERATED  NATIONS." 

Early  in  March  careful  studies  w^ere  made  by  the  Commission  of 
the  pressing  needs  of  the  peoples  inhabiting  the  so-called  "  liberated 
nations  ''  of  Central  Europe  and  the  Xear  East.  These  studies  were 
with  particular  reference  to  the  extent  to  which  the  United  States 
would  be  justified  in  meeting  these  needs  from  sales  of  surplus  war 
stocks  in  Europe.  Extended  conferences  were  held  with  Her- 
bert Hoover  and  numerous  members  of  his  staff.  Information  show- 
ing political,  commercial,  and  social  conditions  in  these  countries 
came  to  us  from  this  and  other  sources. 

On  March  17,  the  chairman  of  the  Commission  received  a  letter 
from  Mr.  Hoover  confirming  what  he  had  previously  said  in  per- 
sonal conversations  and  urging  the  importance  of  selling  surplus 
clothing  to  the  peoples  of  these  countries  who  were  suffering  from 
cold  and  exposure.  This  was  followed  by  a  letter  from  President 
Wilson,  dated  March  24,  urging  the  Commission  to  accept  so  far  as 
it  could  consistently  do  so  Mr.  Hoover's  views  as  to  the  terms  upon 
w^hich  dealings  should  be  undertaken  with  the  liberated  peoples. 
The  President  added: 

I  would  be  glad,  therefore,  if  the  Commission  could  accept  as  its  guiding 
principle  in  these  negotiations  the  fact  that  it  is  not  only  securing  a  rapid 
liquidation  of  materials  that  may  otherwise  prove  practically  unsalable,  but 
also  that  it  is  an  opportunity  to  perform  a  fine  human  service  by  approaching 
the  matter  in  the  most  sympathetic  mind.'^ 

Through  long  conferences  not  only  with  the  representatives  of 
the  nations  and  organizations  seeking  to  make  purchases,  but  with 
members  of  the  American  peace  commission  and  with  many  others 
familiar  with  the  needs  of  these  peoples,  their  resources,  and  their 
prospects;  data  were  assembled  with  reference  to  which  the  Com- 

13  See  Appendix  XI  for  (1)  letter,  Hoover  to  Parker,  Mar.  17,  1919;  (2)  letter,  the 
President  to  Parker,  Mar.  24,  1919  ;  (3)  letter,  Parker  to  the  President,  Mar.  25,  1919 — 
all  dealing  with  the  question  of  sales  to  the  liberated  countries. 


UNITED  STATES  LIQUIDATION   COMMISSION.  29 

mission  was  able  to  outline  a  basis  for  making  sales  and  extending 
credits  in  these  countries. 

The  great  work  accomplished  by  the  American  Relief  Administra- 
tion, with  Mr.  Hoover  at  its  head,  is  known  to  all  the  world.  The 
funds,  however,  which  were  at  the  disposal  of  this  organization,  were 
so  limited  as  compared  to  the  extent  of  the  problems  w^ith  which  it 
had  to  cope,  that  it  w^as  unable  adequately  to  supply  even  the  most 
elementary  necessities  of  life  to  these  peoples.  The  Commission  was 
called  upon  to  dispose  of  vast  quantities  of  salvaged  clothing,  includ- 
ing outer  garments,  underwear,  blankets,  boots  and  shoes  (many 
of  them  patched)  which,  though  decent  and  warm,  had  small  com- 
mercial value.  The  Commission  was  also  called  upon  to  dispose  of 
large  quantities  of  foodstuffs,  some  of  w^hich,  by  reason  of  its  qual- 
ity and  condition  and  of  the  form  of  package  in  which  it  had  been 
prepared  for  war  uses,  had  comparatively  small  commercial  value. 
Both  of  these  classes  of  stocks  seemed  peculiarly  suitable  for  reliev- 
ing the  absolute  hunger  and  want  of  the  liberated  peoples. 

Sales  were  made  not  only  of  subsistence  and  clothing,  but  also  of 
the  elementary  instruments  of  industry  and  transportation,  in  order 
that  these  people  might  be  able  to  go  to  work  and  serve  themselves, 
instead  of  continuing  to  be,  as  many  of  them  were,  objects  of  charity. 
It  was  believed  that  these  sales  would  also  serve  a  very  important 
function  in  stabilizing  the  governments  and  social  institutions  which 
were  beginning  to  take  shape  against  most  terrible  odds,  and  that 
they  would  help  to  check  the  insidious  advances  of  Bolshevism. 

All  of  these  countries  are  relatively  rich  in  natural  resources  and 
are  for  the  most  part  inhabited  by  sturdy  and  competent  races.  A 
study  of  such  resources  and  of  the  number  and  quality  of  their  in- 
habitants convinced  the  Commission  that,  under  all  of  the  conditions 
as  they  existed  at  the  time,  the  United  States  Avas  justified  in  taking 
the  risk  of  extending  credits,  especially  as  their  indebtedness  to  us 
constituted  the  major  portion  of  their  national  debts.  In  some 
instances  it  was  felt  desirable  to  make  sales  to  co-operative  societies 
QT  organizations,  rather  than  to  the  governments.  In  each  case, 
however,  the  Commission  has,  either  directly  or  through  such  co- 
operative society,  taken  government  obligations  in  payment  for  the 
stocks.  These  bonds  all  bear  interest  at  the  rate  of  5  per  cent  per 
annum,  payable  semi-annually,  and  they  mature  in  from  one  to  six 
years  after  date. 

In  the  matter  of  fixing  the  prices  and  terms  of  purchase,  the  Com- 
mission occupied  a  position  of  supreme  advantage  over  the  buyers, 
for  in  many  cas^s  these  peoples  w^ere  in  such  a  position  that  they  had 
to  buy  from  us  or  see  their  people  go  hungry  and  cold.  Prices  and 
conditions  were  carefullv  studied,  however,  by  the  Commission  and 


80  UNITED  STATES  LIQUIDATION   COMMISSION. 

every  effort  was  made  to  treat  these  purchasers,  as  well  as  the  United 
States,  with  absolute  fairness.  The  foodstuffs  were  sold  f.  o.  b.  our 
warehouses  in  France  for  cost  to  the  American  Expeditionary  Forces, 
including  allowances  for  transportation  and  handling.  The  salvaged 
shoes,  blankets,  and  clothing,  all  "  renovated,  overhauled,  and  classi- 
fied," were  sold  on  the  basis  of  cost,  less  a  percentage  for  deteriora- 
tion according  to  class.  The  medicines,  machinery,  tools,  and  trans- 
port materials  were  sold  on  the  basis  of  cost  in  France,  less  a  dis- 
count for  deterioration  through  use  or  otherwise.  On  the  whole,  the 
prices  were  rather  higher  than  could  have  been  procured  at  whole- 
sale from  any  other  purchasers.  They  were  believed,  however,  to  be 
fair  and  just  when  considered  in  the  light  of  the  quality  of  the  se- 
curities and  other  circumstances  associated  with  the  transactions. 

The  sales  which  have  been  made  to  or  for  the  use  of  these  so- 
called  "  liberated  nations  "  ^^  are  as  follows : 

Poland $59,  365,  111.  97 

Kingdom  of  Serbs,  Croats,  and  Slovenes 20,  464, 191.  25 

Roumania 13,  012,  689.  00 

Russian    Government 428,  299.  46 

Czechoslovakia 19,  098,  874.  27 

Revalis    (Esthonia) 12,262,818.99 

Vilnis   (Lithuania) 4,  414,  861.  39 

Central  Union  Konsums  (Latvia) 2,556,952.84 

Ukrailian   (Ukrainia) S,  500, 222.  67 

Total 140, 104, 021.  84 

GIFT  TO  RED  CROSS. 

Pursuant  to  an  act  of  Congress,  passed  early  in  July,  1919,  author- 
izing the  Secretary  of  War — 

to  place  at  the  jillsposal  of  the  American  Red  Cross  such  medical  and  surgical 
supplies  and  supplementary  and  dietary  foodstuffs  used  in  the  treatment  of  the 
sick  and  injured,  but  which  are  not  now  essential  to  the  needs  of  the  American 
Expeditionary  Forces  or  needed  for  use  in  the  military  hospitals  in  the  United 
States  or  as  military  or  hospital  stores  for  the  Army  of  the  United  States,  to  be 
used  by  said  American  Red  Cross  as  it  shall  determine  to  relieve  and  supply  the 
pressing  needs  of  the  peoples  of  the  countries  involved  in  the  late  war, 

the  Secretary  of  War,  acting  through  the  Commission,  placed  at  the 
disposal  of  the  American  R^ed  Cross,  Avithout  cost  to  it,  medical, 
surgical,  and  hospital  supplies  and  equipment  and  dietary  foodstuffs 
of  the  value  of  $9,964,851.16,  which  were  expressly  reserved  from  the 
stocks  sold  to  France  and  actually  delivered  to  the  Red  Cross  repre- 
sentatives.    In  addition  to  this,  the  French  Government  has,  in  the 

^3  See  Appendix  XII  for  a  list  of  the  liberated  nations,  with   corresponding  commer- 
cial organizations  for  each,  with  which  the  Commission  has  dealt. 


UNITED   STATES  LIQUIDATION   COMMISSION.  31 

bulk  sale  contract  of  Auoust  1,  1919,  assumed  the  obligation  to  re- 
sell, on  the  basis  of  cost  to  it,  any  further  medical  or  suro:ical  sup- 
plies and  dietary  foodstuffs  which  the  American  Red  Cross  may  need 
for  use  in  Europe. 

COMMERCIAL  SALES  OF  PROPERTY  LOCATED  IN  FRANCE. 

Prior  to  the  consummation  of  the  bulk  sale  to  France,  diligent  ef- 
forts were  made  by  the  Commission  to  find  purchasers,  for  cash  or 
its  equivalent,  for  surplus  stocks  located  in  France ;  but  on  account  of 
the  character  and  condition  of  these  stocks,  the  condition  of  exchange, 
and  the  difficulty  of  procuring  transportation  by  railroad  or  water, 
it  was  impossible  to  dispose  of  large  quantities  of  these  stocks  to 
advantage. 

The  first  important  sale  of  this  kind  which  the  Commission 
authorized  Avas  made  to  the  American  Relief  Administration,  of 
which  Herbert  Hoover  was  director.  These  stocks  were  destined 
for  Central  Europe  and  the  Near  East,  and  consisted  of  prime  neces- 
sities— cereals,  fats,  condensed  milk,  a  small  quantity  of  medical  sup- 
plies, and  a  few  motor  trucks  needed  for  distributing  them.  The 
sales  aggregated  $15,959,455.15,  and  the  terms  were  cash.  The  prices 
were  calculated  on  a  basis  which  would  justify  the  Relief  Administra- 
tion in  taking  these  supplies  in  France  in  preference  to  having  them 
purchased  in  the  United  States  and  shipped  over.  In  this  way 
shipping  Avas  economized,  and  a  considerable  portion  of  our  surplus 
foodstuffs  was  promptly  disposed  of  for  cash  and  through  a  channel 
w^hich  would  use  it  to  satisfy  actual  hunger  and  relieve  dire  distress. 

When  the  Commission  arrived  in  Europe  it  found  that  our  Army 
had  181,909  surplus  horses  and  mules.  The  demand  for  horses  was 
very  great,  and  the  prices  were  good,  though  the  demand  for  mules 
was  more  limited.  Many  of  these  animals  were  in  poor  condition,  and 
the  Army  was  rapidly  declaring  them,  surplus.  As  the  estimated 
average  cost  of  maintaining  a  horse  or  mule  in  France  is  $2  per  day, 
and  even  more  in  Germany,  the  problem  of  their  disposition  required 
prompt  attention.  The  Commission  decided  to  sell  them  for  cash 
only,  and,  so  far  as  possible,  at  such  places  and  at  such  times  as  they 
were  found  surplus.  They  were  disposed  of  with  reasonable  prompt- 
ness through  auction  sales,  sales  to  the  French  Government,  to  Po- 
land, to  Czechoslovakia,  and  to  others,  all  at  fair  prices.  The  French 
minister  of  reconstruction  purchased  several  thousands,  which  he  in 
turn  sold  on  credit  in  the  devastated  regions  of  France,  thus  using 
them  to  furnish  prompt  aid  in  the  problem  of  getting  the  soil  back 
under  cultivation  and  of  starting  the  wheels  of  industry.  More 
than  5,000  animals  were  sold  to  Poland.    The  total  amount  realized 


32  UNITED  STATES  LIQUIDATION   COMMISSION. 

on  the  sale  of  all  American  Expeditionary  Forces,  animals  was 
$35,133,065.02,  the  number  being  181,909.^* 

The  problem  of  sales  in  Spain  consumed  not  a  little  of  the  Com- 
mission's attention.  It  had  two  phases.  During  the  war  our  Army 
had  agents  in  Spain  who  were  purchasing  supplies  in  considerable 
quantities,  and  upon  the  signing  of  the  armistice  there  was  a  limited 
amount  of  these  materials  in  Spain  to  be  disposed  of,  as  well  as  con- 
tracts to  cancel  and  adjust.  Further,  during  the  war,  when  the  gold 
embargo  was  in  force,  the  United  States  had  caused  to  be  borrowed 
in  Spain,  in  order  to  avoid  paying  a  discount  on  dollars,  some  155,- 
000,000  pesetas  and  the  Commission  made  a  determined  effort  to  sell 
there  for  cash  a  sufficient  quantity  of  surplus  stock  to  pay  and  retire 
this  indebtedness. 

The  stocks  found  in  Spain  at  the  close  of  the  war  were  small. 
They  consisted  principally  of  horse  blankets,  cotton  duck,  vinegar, 
ofl:ce  supplies,  iron  buckets,  salt  bags,  cork  shavings,  etc.  All  of 
these  were  sold  for  cash,  the  total  aggregating  $823,772.54.  In  addi- 
tion we  had  some  lumber  in  Portugal  which  was  sold  for  $38,060.59. 

In  an  effort  to  make  large  sales  in  Spain,  special  agents  were  sent 
there  by  the  Commission  to  develop  markets  and  many  hours  were 
spent  in  conference  in  Paris  with  prospective  Spanish  purchasers. 
But  the  Commission  was  unable  to  induce  any  responsible  Spanish 
concern  to  purchase  any  of  the  American  stocks  in  France,  except 
on  condition  that  the  Commission  would  cause  deliveries  to  be  made 
either  at  French  ports  or  on  the  Spanish  frontier.  This  was  because 
of  the  great  difficulty  encountered  in  transporting  stocks  over  French 
railroads.  Finally,  in  order  to  make  an  advantageous  sale,  the  Com- 
mission assumed  this  burden  and,  through  the  Army,  loaded  the  cars 
at  our  depots  and  transported  them  to  the  ports  or  to  the  Spanish 
border,  where  deliveries  were  consummated.  Endless  annoyances 
were  encountered  in  effecting  these  deliveries  and  there  were  many 
delays.  By  the  time  the  bulk  sale  was  concluded  and  the  Spanish 
sales  discontinued,  stocks  aggregating  in  value  $4,466,519.77  had 
been  sold  there,  but  deliveries  could  not  be  finished  until  a  long  time 
afterwards.  They  consisted  principally  of  tobacco  and  engineering 
and  quartermaster  supplies. 

The  Commission  sold  also  to  the  Spanish  Government  10,000  tons 
of  surplus  Irish  potatoes  which  the  Army  had  bought  from  Gr©at 
Britain.  The  price  was  1,616,147  pesetas,  which  amount  has  been 
paid  in  full. 

Early  in  1917,  before  the  arrival  in  France  of  sufficient  motor 
transportation  from  America,  the  American  Expeditionary  Forces 

"  See  Appendix  XIII  for  chart  showing  animals  sold,  with  their  purchasers  and 
prices. 


UNITED  STATES  LIQUIDATION   COMMISSION.  33 

found  it  necessary  to  purchase  motor  transportation  from  Great 
Britain.  All  of  these  cars  of  English  manufacture  which  the  Com- 
mission found  in  France  were  sold  to  an  English  syndicate  for 
$1,202,566.46.  These  cars,  generally  speaking,  had  been  longer  in 
use  and  were  more  exhausted  by  wear  and  tear  than  the  other  motor 
transport  in  France. 

In  addition  to  the  sales  noted  above,  numerous  others,  some  small 
and  some  large,  were  made  for  cash  from  stocks  of  various  kinds 
located  in  France.  It  should  be  noted  in  particular  that,  in  addition 
to  the  bulk  sale,  stocks  aggregating  $87,780,942.76  and  232,565,047.51 
francs  were  sold  to  the  French  Government.^^ 

BELGIAN  SALES  AND  GENERAL  SETTLEMENT. 

The  Commission  made  sales  to  Belgium  amounting  in  all  to  ap- 
proximately $29,000,000.  Belgium  had  claims  against  the  American 
Army:  (1)  Arising  out  of  leases  of  Belgian  locomotives  to  the 
American  Expeditionary  Forces  during  the  war;  (2)  for  transpor- 
tation of  troops  and  supplies,  both  by  rail  and  on  the  Rhine;  (3) 
for  port  charges  at  Antwerp.  These  claims  were  examined  and  an 
account  was  stated  showing  approximately  $2,000,000  in  favor  of 
Belgium.  Instead  of  paying  this  amount,  it  was  set  off  against  the 
amount  due  the  United  States  on  all  sales  to  Belgium,  and  that 
country  agreed  to  execute  and  deliver  to  the  United  States  notes  or 
bonds  for  the  balance,  amounting  to  $27,162,720.95.  These  bonds 
mature  three  years  after  date  and  bear  interest  at  the  rate  of  5  per 
cent  per  annum,  payable  semi-annually. 

These  agreements  are  contained  in  a  contract  of  general  settlement 
entered  into  between  the  Commission  and  the  Belgian  Government 
on  November  7, 1919,  by  the  terms  of  which — 

Belgium  releases  the  United  States  from  any  and  all  debts,  claims,  and  lia- 
bilities, whether  in  contract  or  tort,  which  Belgium  now  has  or  may  have  by 
reason  of  any  act  done  or  engagement  entered  into  on  or  before  the  31st  day 
of  October,  1919,  for  materials  or  services  furnished  to  or  damages  done  by 
the  American  forces  in  Europe,  except  as  hereinafter  stated. 

Belgium  further  agrees — 
to  save  the  United  States  harmless  from  any  and  all  claims  of  whatever  nature 
against  the  United  States  or  members  of  its  military  or  naval  forces,  on  the 
part  of  any  railroad  company  within  the  limits  of  the  Kingdom  of  Belgium, 
whether  such  railway  company  is  the  property  of  the  Belgian  Government  or 
not." 

16  See  Appendix  XIV  for  three  charts :  Chart  I  shows  the  amounts  purchased  by 
each  country  by  services ;  Chart  II,  the  amounts  by  categories  ;  Chart  III,  the  location 
in  Europe  of  this  material  when  sold. 

18  See  Appendix  XV  for  copy  of  contract  of  general  settlement  between  the  United 
States  of  America,  acting  through  the  chairman  of  the  Liquidation  Commission,  and  the 
Kingdom  of  Belgium,  acting  through  the  premier  and  minisster  of  finance ;  also  for  a  state- 
ment of  the  account  upon  which  this  general  settlement  was  based. 

183176—20 3 


34  UNITED  STATES  LIQUIDATION   COMMISSION. 

In  addition  to  the  stocks  sold  to  the  Belgian  Government,  sales  of 
goods  located  at  Antwerp  were  made  to  other  nations,  individuals, 
firms,  associations,  and  corporations,  in  the  amount  of  $3,845,032.45. 
Of  these  stocks,  motor  transport  brought  $268,339.97.  A  sale  amount- 
ing to  $1,852,326.99,  consisting  principally  of  clothing,  was  made 
to  Czechoslovakia  on  the  basis  of  75  per  cent  of  cost  laid  down  at 
Antwerp  (i.  e.,  cost  plus  transportation  and  handling).  The  bal- 
ance of  the  stocks  at  Antwerp,  consisting  of  broken  and  irregular 
groups  of  materials,  was  disposed  of  in  a  bulk  sale  to  Poland  for 
$976,583.22,  the  price  being  calculated  on  the  basis  of  70  per  cent  of 
cost  plus  transportation  and  handling.  The  price  received  for  all 
surpluses  located  at  Antwerp,  and  the  Hook  von  Holland,  including 
sales  made  to  Belgium,  averaged  a  little  under  74  per  cent  of  the 
cost  of  the  goods  laid  down  in  Europe. 

SALES  IN  GERMANY. 

When  the  Army  of  Occupation  took  its  position  on  the  Rhine 
large  quantities  of  Army  stores  and  equipment  were  moved  there, 
principally  from  France  and  to  some  extent  from  the  United  States. 
As  this  Army  was  being  withdrawn  from  time  to  time  and  returned 
to  the  United  States,  stocks  on  the  Rhine  were  becoming  surplus  and 
the  duty  devolved  upon  the  Commission  to  make  disposition  of 
them.  The  suggestion  that  they  be  returned  to  France  and  placed 
in  American  Expeditionary  Forces'  depots  there  for  storage  and 
disposition  with  the  other  stocks  in  France  was  rejected,  both  be- 
cause of  the  difficulty  of  transportation  and  the  difficulty  of  dispos- 
ing of  the  stocks  already  in  France. 

One  of  the  first  problems  which  arose  in  Germany  was  that  of  the 
disposition  of  surplus  horses  and  mules.  There  was  a  serious  short- 
age of  forage,  and  keeping  the  animals  over  a  long  time  while  a 
market  was  being  found  was  very  expensive.  Prompt  action  was 
taken  by  the  Commission.  Many  of  the  animals  were  sold  to  indi- 
viduals and  firms  through  auction  sales,  competitive  bids,  and  other- 
wise. A  large  number  of  them  went  to  the  Minister  of  Reconstruc- 
tion of  France,  some  went  to  Poland,  and  a  few  to  Czechoslovakia. 

In  order  to  direct  the  disposition  of  the  stocks  in  Germany  more 
satisfactorily,  the  Commission  established  a  branch  office  at  Coblenz 
about  the  1st  of  July,  and  put  it  in  charge  of  J.  G.  Adams,  as 
special  commissioner.  Mr.  Adams  had  previously  been  serving  as 
executive  secretary  of  the  Commission.  Negotiations  were  taken  up 
forthwith  with  several  of  the  strongest  German  financial  institutions 
having  connections  in  the  United  States  with  a  view  to  the  formation 
of  groups  or  syndicates  with  facilities  for  making  purchases  in 
dollars,  or  on  dollar  credits.     Consultations  were  held  with  such 


UNITED  STATES  LIQUIDATION   COMMISSION.  35 

institutions  as  Warburg  &  Co.  of  Hamburg;  Speyer  and  Ellison  of 
Frankfort;  Oppenheim  &  Son  of  Cologne;  the  Deutches  Bank  of 
Berlin,  and  others ;  while  at  the  same  time  the  Commission,  through 
the  War  Department  at  home,  was  trying  to  interest  the  American 
correspondents  of  these  houses  in  the  transactions.  Negotiations 
were  also  opened  with  numerous  American,  French,  English,  Dutch, 
Belgian,  and  Scandinavian  concerns.  All  of  these  people  were  inter- 
ested in  the  stocks  which  we  had  for  sale.  Many  of  them  sent  repre- 
sentatives to  inspect  them;  but  without  exception,  after  days  and 
weeks  of  conferences  and  discussions,  they  expressed  the  conclusion 
that  under  the  conditions  as  they  existed  at  that  time,  particularly  in 
view  of  the  fluctuating  rates  of  exchange,  the  business  was  quite 
impossible. 

On  August  10,  after  this  effort  to  sell  on  a  dollar  basis  was  believed 
to  be  a  failure,  it  was  decided  to  send  out  a  notice  to  a  large  number 
of  prospective  purchasers  offering  the  goods  on  more  liberal  terms. 
The  notice  offered  the  stocks  as  a  whole,  or  in  large  blocks,  to  be  paid 
for  in  American  dollars,  Swiss  francs,  Dutch  guilders,  British 
pounds,  French  francs,  or  German  marks,  at  the  several  current  rates 
of  exchange,  preference  being  given  to  bids  based  on  currencies  in  the 
order  named.  Notwithstanding  the  fact  that  every  effort  was  made  to 
encourage  bids  under  this  offer,  no  satisfactory  bid  was  received. 
There  were  several  instances  of  speculators  who  made  inadequate 
offers  on  small  lots  of  the  most  desirable  stocks,  the  sale  of  which 
would  have  prejudiced  the  sale  of  the  stocks  as  a  whole.  All  bids  were 
rejected. 

The  exchange  situation  in  the  Rhine  country  proved  to  be  an  almost 
insurmountable  obstacle  in  the  way  of  a  reasonably  satisfactory  dis- 
position of  these  stocks,  which  were  carried  on  our  inventories  in 
terms  of  dollars  at  war-time  cost  plus  20  per  cent  for  transportation 
and  handling,  save  motor  transport,  to  which  was  added  45  per  cent 
of  first  cost  for  transportation  and  handling. 

A  great  part  of  the  stocks  were  of  commodities  produced  in  Ger- 
many which  could  be  purchased  on  the  Rhine  in  the  open  market  at 
retail,  at  prices  considerably  less  than  those  stated  in  our  inventories. 
The  purchasing  power  of  the  mark  had  decreased,  perhaps  not  more 
than  200  per  cent,  while  its  exchange  value  on  the  American  dollar 
had  decreased  more  than  500  per  cent.  The  difficulties  encountered 
in  selling  American  goods  in  Germany  under  such  conditions  are 
quite  obvious. 

An  effort  was  made  to  organize  a  syndicate  which  might  buy 
these  stocks  in  exchange  for  certain  German  products  which  are 
required  or  can  be  utilized  to  advantage  in  the  United  States;  pot- 
ash for  example.     It  was  found,  however,  that  the  Germans  were 


36  UNITED  STATES  LIQUIDATION   COMMISSION. 

fully  aware  of  the  importance  to  them  of  disposing  of  such  of  their 
products  as  were  marketable  in  the  United  States  for  dollars  only, 
for  it  is  only  by  selling  for  dollars  that  they  can  strengthen  their 
exchange  with  us. 

While  these  efforts  were  being  made  to  sell  the  stocks  as  a  whole, 
there  were  certain  smaller  sales  which  had  to  be  made  by  way  of 
salvage.  The  Army  of  Occupation  had  taken  with  it  a  large  supply 
of  Signal  Corps  equipment,  both  for  its  own  use  and  for  equipping 
the  proposed  Galician  expedition.  Such  of  this  stock  as  was  de- 
signed for  field  use  and  has  small  commercial  value  was  returned  to 
the  United  States  for  the  use  of  the  War  Department.  What  re- 
mained, being  largely  unserviceable,  was  sold  for  1,200,000  marks. 

The  surplus  tobacco  was  deteriorating  and  was  not  an  important 
factor  for  fostering  a  bulk  sale,  so  it  was  sold  separately.  It  brought 
cost  plus  6  per  cent.  The  candy  and  confectionery  was  deteriorating. 
We  had  a  surplus  which  was  carried  on  the  inventory  at  $1,200,000. 
It  was  sold  early  in  August  at  87^  per  cent  of  the  inventory  valua- 
tion, which  was  more  than  first  cost  to  the  United  States. 

We  had  a  stock  of  so-called  German  armistice  trucks.  These  had 
been  allotted  to  the  American  Army  under  the  terms  of  the  armistice. 
They  had  been  built  in  Germany  under  war  conditions,  were  equipped 
with  live  axles,  chain  drives,  and  steel  tires.  They  had  deteriorated 
considerably  through  use  and  through  standing*  in  the  open  for  more 
than  eight  months,  and  they  needed  considerable  repair  before  they 
would  be  valuable  for  commercial  uses.  They  were  sold  in  block 
for  13,000,000  marks. 

Finally,  in  October,  after  numerous  failures  in  other  directions, 
the  Commission  was  successful  in  interesting  a  strong  English  syndi- 
cate in  the  purchase  of  the  surplus  used  motor  equipment  in  Ger- 
many. This  equipment  represented  a  high  percentage  in  cost  value 
of  all  our  surplus  stocks  in  Germany.  It  was  rapidly  deteriorating 
from  non-use  and  exposure  to  the  elements  and  had  to  be  handled 
promptly  or  it  would  soon  have  become  practically  useless.  After 
a  long  series  of  negotiations  this  syndicate  has  purchased  and  taken 
possession  of  all  of  the  American  surplus  motor  transport  on  the 
Rhine  on  substantially  the  following  basis : 

1.  The  estimated  purchase  price  is  fixed  at  £3,250,000,  of  which 
£325,000  has  been  paid  in  cash. 

2.  This  estimated  purchase  price  is  subject  to  increase  or  decrease 
on  check  of  the  equipment  and  material. 

3.  If  any  controversy  as  to  quantity  or  classification  should  arise 
in  making  such  check,  such  controversy  shall  be  settled  by  the  Com- 
mission's present  representative  in  Germany,  Lieut.  Col.  T.  H.  Krutt- 
schnitt,  acting  for  America,  and  by  Lieut.  Col.  G.  W.  Parkinson  or 


UNITED  STATES  LIQUIDATION   COMMISSION.  37 

Sir  Percival  Perry,  acting  for  the  purchasers,  and  in  the  event  of 
their  disagreement  the  decision  of  Lieut.  Col.  Kruttschnitt  shall  be 
final. 

4.  The  balance  of  the  purchase  price  shall  be  paid  in  three  equal 
installments,  the  first  maturing  July  1,  1920,  the  second  December  1, 
1920,  and  the  third  April  1,  1921,  together  with  interest  on  the  entire 
amount  at  the  rate  of  5  per  cent  per  annum  from  April  1,  1920, 
interest  payable  semi-annually. 

5.  The  United  States,  through  its  general  sales  agent  in  Germany, 
Lieut.  Col.  Kruttschnitt,  or  his  successor,  remains  in  constructive 
possession  of  and  continues  supervision  over  all  of  the  property  pur- 
chased, retaining  a  lien  upon  it  for  the  purchase  price  until  the  same 
is  paid  in  full.  None  of  these  stocks  can  be  withdrawn  from  their 
present  locations  and  sold  by  the  purchasers  without  the  consent  of 
Col.  Kruttschnitt  and  the  payment  to  America  of  an  amount  equal 
to  the  full  purchase  price  of  the  property  so  withdrawn. 

6.  There  has  been  deposited  in  the  Guaranty  Trust  Co.  of  New 
York,  Paris  branch,  £250,000  to  the  credit  of  T.  H.  Kruttschnitt, 
trustee,  and  subject  to  his  and  the  purchasers'  joint  check.  This  fund 
is  to  be  applied  to  putting  said  motor  equipment  in  condition  for 
use  and  sale.  It  is  stipulated  that  the  purchasers  shall,  oji  the  de- 
mand of  Col.  Kruttschnitt  or  his  successor,  make  additional  deposits 
from  time  to  time  to  maintain  this  fund,  so  that  it  shall  never  be 
substantially  less  than  £250,000.  It  is  further  stipulated  that,  if  at 
any  time  Col.  Kruttschnitt  or  his  successor  in  office  or  the  War 
Department  of  the  United  States  shall  not  be  satisfied  with  the 
progress  made  by  the  purchasers  in  conditioning  and  marketing  this 
motor  transport,  the  entire  balance  of  this  deposit  may  be  withdrawn 
and  applied  toward  the  payment  of  the  purchase  price. 

7.  The  contract  is  to  be  construed  according  to  the  laws  in  effect 
at  Washington,  D.  C,  and  the  purchasers  irrevocably  designate  the 
British  Consul  General  at  New  York  as  their  agent,  on  whom  service 
may  be  had  in  any  suit  Avhich  may  be  brought  by  the  United  States 
to  enforce  the  terms  of  the  contract.^^ 

It  is  believed  that  this  contract  amply  protects  and  secures  the 
United  States,  and  that,  all  things  considered,  it  is  a  most  advan- 
tageous one  from  our  point  of  view. 

The  disposition  of  the  motor  transport  on  the  Rhine  left  us  with 
depleted  surplus  stocks,  the  sale  of  which,  excepting  the  subsistence 
and  clothing,  was  difficult.  After  prolonged  conferences  with  rep- 
resentatives of  Poland,  the  Commission  effected  a  sale  to  the  Polish 
Relief  &  Supply  Corporation,  by  the  terms  of  which  all  of  the  re- 

"See  Appendix  XVI  for  copy  of  (1)  the  contract  of  sale,  dated  Oct.  1,  1919,  and  (2) 
supplement  to  contract  of  sale,  dated  Dec.  3,  1919. 


38  UNITED  STATES  LIQUIDATION   COMMISSION. 

maining  surplus  stocks  on  the  Rhine  were  sold  in  bulk  on  a  basis  of 
70  per  cent  of  their  inventoried  values.  These  stocks  consisted  prin- 
cipally of  subsistence,  clothing,  ordnance,  medical  supplies,  and  a 
great  variety  of  miscellaneous  equipment.  Deliveries  under  this  sale 
have  been  completed  and  the  stocks  all  moved  out  of  Germany  by 
Poland.    The  total  bill  was  $5,536,867.71. 

SALES  IN  ENGLAND. 

Durinfif  the  war.  Great  Britain  had  been  made  a  United  States 
military  base,  called  "  Base  Section  No.  3,"  for  the  purpose  of  (a) 
bringing  troops  through,  (h)  purchasing  materials,  (c)  maintaining 
hospitals  and  rest  camps,  and  (d)  training  aviators  and  assembling 
machines. 

This  program  involved  our  owning  a  large  amount  of  property  in 
England.  We  could  not  take  title  to  the  land  under  English  law, 
and  when  we  took  possession  it  had  to  be  under  a  contract  to  re- 
store the  land  to  its  original  condition  at  the  close  of  the  war. 
Prior  to  the  armistice  the  United  States  had  built,  or  taken  over 
from  the  British,  numerous  and  extensive  installations  in  the  form 
of  (a)  aviation  plants  and  airdromes,  (h)  hospitals,  (c)  rest  camps 
and  depots.^^  This  property  had  to  be  sold  out  as  it  stood,  or,  if 
salvaged,  the  ground  had  to  be  restored  to  its  original  condition. 

Besides  the  buildings  and  installations  constructed  by  the  United 
States,  many  more  buildings  were  rented  by  our  forces  either  on 
ordinary  leases  or  under  requisition  proceedings  carried  out  on  our 
behalf  by  the  appropriate  British  Government  department. 

Further,  we  had  war  materials — ordnance,  quartermaster,  engi- 
neering, medical,  motor  transport — of  every  description,  of  which 
we  were  in  process  of  taking  delivery  at  the  time  of  the  armistice. 
A  large  percentage  of  these  stocks  had  been  purchased  for  us  by 
various  departments  of  the  British  Government,  and  was  of  course 
British  made  goods.  Shortly  after  the  armistice,  the  British  offered 
to  assist  us  in  the  sale  of  this  surplus  property  through  their  Dis- 
posal Board,  in  a  manner  analogous  to  the  assistance  which  they 
had  given  us  in  its  purchase.  It  was  found,  however,  that  while  the 
British  Disposal  Board  got  good  prices,  it  was  rather  slow  in  selling 
stocks  for  us,  and  we  have  therefore  taken  little  advantage  of  the 
offer. 

As  soon  as  our  sales  in  England  began,  the  British  Government 
raised  the  question  of  customs  duties  on  goods  brought  in  from  the* 
United  States.    These  duties  were  paid  on  some  of  the  earlier  sales, 

18  See  Appendix  XVII  for  a  catalogue  of  all  Installations,  or  property  attached  to 
the  realty,  which  the  United  States  has  owned  in  Great  Britain  during  or  since  the 
war,  showing  the  number  of  buildings,  size,  approximate  cost,  and  disposition. 


UNITED  STATES  LIQUIDATION   COMMISSION.  39 

Dut  later  when  the  French  Government  raised  the  same  question 
against  the  British  for  the  sale  of  goods  in  France,  and  the  general 
question  was  under  discussion  in  Paris,  the  British  agreed  to  with- 
draw their  claim  for  duties  so  far  as  it  referred  to  American  goods. 
They  did,  however,  insist  that  our  surpluses  should  not  be  thrown 
indiscriminately  on  their  markets  so  as  to  disturb  trade  conditions. 
As  this  demand  seemed  only  reasonable,  and  would  be  in  accord 
vrith  our  precedent  in  the  Philippines  at  the  close  of  the  Spanish 
War,  we  agreed  to  sell  only  after  obtaining  permission  of  the  ap- 
propriate department  of  their  government.  This  permission  they 
have  always  been  very  generous  in  granting. 

The  disposition  of  buildings  and  other  structures  has  been  the 
most  serious  problem.  Each  plant,  hospital,  and  camp  has  had  to 
be  worked  out  separately.  The  receipts  from  this  class  of  property 
liave  naturally  been  very  small  in  proportion  to  the  original  costs, 
because  our  obligation  to  restore  the  site  would  in  most  cases  have 
cost  more  than  the  salvage  value  of  the  buildings  removed.  We  have 
thus  been  in  a  very  awkward  position  as  a  party  to  a  bargain.  The 
British  Government,  however,  has  always  exhibited  a  most  cordial 
desire  to  aid  us  in  any  way  possible  in  these  dispositions,  even  con- 
senting to  take  title  to  land  in  our  behalf  whenever  that  action  would 
help  us  to  reach  a  better  settlement. 

The  personal  property  has  been  disposed  of  in  several  ways.  The 
bulk  of  it  was  sold  out  in  relatively  small  quantities,  by  private  sale, 
by  auction,  by  sealed  bids,  through  agents,  or  through  the  British  Dis- 
posal Board,  to  British  nationals  principally.  Some  of  it  has  gone  to 
other  buyers — to  the  Commission  for  Relief  of  Belgium  and  Northern 
France,  and  to  Poland."  A  considerable  quantity  of  material,  es- 
pecially artillery,  aviation,  and  chemical-warfare  equipment,  has 
been  shipped  home,  on  the  theory  that  these  articles  would  be  useful 
to  the  Army  for  training,  educational,  and  other  purposes. 

During  the  war  the  United  States  built  a  submarine  cable  for  war 
uses  between  Cuckmere,  England,  and  Cape  d'Antifer,  France.  Un- 
der authorization  of  the  Commission,  this  cable  was  sold  to  England 
and  France  as  joint  purchasers,  for  £30,000,  paid  to  us  by  England. 
The  conditions  of  the  contract  are  that  the  purchasers  shall  jointly 
own  and  operate  the  cable,  and  that  at  any  time,  upon  request,  they 
«hall  lease  to  the  United  States  this  or  a  similar  cross-channel  cable. 


18  See  Appendix  XIV,  Chart  III,  column  marked  "  England."  This  shows  the  total 
receipts  from  all  sales  made  in  Great  Britain,  the  amounts  being  shown  by  "  Categories  " 
of  property. 


40  UNITED  STATES  LIQUIDATION   COMMISSION. 

SUMMARY  OF  SALES. 

For  the  purpose  of  telling  in  a  brief  and  graphic  way  the  long  story 
of  all  sales  of  surplus  war  supplies  in  Europe,  other  than  the  bulk 
sale  to  France  for  $400,000,000,  three  charts  have  been  prepared^ 
expressed  in  terms  of  selling  price.^^ 

Chart  I  shows  the  totals  in  terms  of  selling  value  of  all  sales  made 
to  each  purchasing  nation  and  to  private  firms,  arranged  according 
to  the  respective  services  of  the  American  Expeditionary  Forces  in 
whose  possession  the  stocks  were  held  when  sold. 

Chart  II  shows  the  purchasers  in  the  same  way  as  Chart  I  but 
the  materials  are  listed  according  to  the  18  categories  ^^  by  which 
all  American  Expeditionary  Forces'  stocks  have  been  classified,  both 
for  the  purpose  of  purchase  and  of  sale  in  Europe. 

Chart  III  also  shows  the  stocks  by  categories,  but,  in  place  of  the 
purchasing  nations  across  the  top  there  is  given  the  countries  in 
which  the  stocks  were  located  at  the  time  of  their  sale. 

These  charts  show  a  total  of  sales  aggregating  $377,905,193.23  and 
233,254,054.87  francs.  Converting  these  francs  into  dollars  at  the 
normal  rate  of  exchange,  and  adding  to  these  sums  the  $400,000,000  re- 
ceived from  France  for  the  bulk  sale,  we  have  a  grand  total  of 
$822,923,225.82  received  for  all  sales  of  War  Department  materials 
made  in  Europe. 

In  payment  for  these  stocks,  government  bonds  aggregating 
$564,233,302.87  have  been  taken  from  France,  Belgium,  and  eight 
countries  of  Central  Europe  and  the  Near  East.  The  French  bonds 
were  for  $400,000,000.  Sales  amounting  to  $108,570,596.63  and 
689,007.36  francs  were  made  for  cash  on  delivery,  and  short-term 
credits  were  taken  for  the  rest.  The  appropriate  Army  services  have 
been  taking  care  of  the  collections  on  these  short-term  credits  and 
nearly  all  of  them  have  been  liquidated  at  this  time. 

20  See  Appendix  XIV  for  Charts  I,  II,  and  III,  summarizing  In  different  ways  all 
sales  of  war  surpluses  in  Europe,  except  the  bulk  sale  to  France. 

21  See  Appendix  VI  for  a  list  of  the  18  categories  with  the  sub-headings  under  each. 


III.  SETTLEMENT  OF  CLAIMS. 


When  hostilities  ceased,  November  11,  1918,  the  United  States  had 
2,056,123  men  in  France,  and  plans  to  send  over  2,000,000  more  men 
were  far  advanced.  The  country  was  investing  in  the  war  in  terms 
of  billions  of  dollars.  Practically  every  industry  in  America  was 
doing  something  to  support  the  Army.  The  War  Department  itself 
was  operating  vast  factories.  It  was  buying  vaster  stores  of  sup- 
plies. In  laying  and  developing  plans  for  all  of  these  activities, 
available  shipping — the  limiting  factor — had  to  be  taken  into  ac- 
count, as  well  as  the  location  of  raw  materials  and  the  equipment 
and  factory  facilities  for  producing  war  supplies,  both  at  home  and 
in  Europe.  Consequently,  America  bought  from  Europe  when  and 
what  Europe  could  produce  most  effectively  and  expeditiously,  and 
she  sold  to  Europe  when  and  what  she  could  produce  most  speedily 
and  effectively. 

Thus  it  came  about  that  many  buying  programs  and  arrangements 
were  in  full  force  and  vigor  when  the  armistice  was  signed;  some 
in  the  form  of  technical  contracts,  some  as  pools,  and  some  the  result 
of  oral  understandings  or  plans  worked  out  by  the  Allied  Purchasing 
Commission.  All  of  these  programs,  whatever  their  form,  had  to  be 
suddenly  broken  off.  The  expense  of  stopping  this  vast  production 
at  the  end  of  the  war  was,  in  many  cases,  very  great.  It  was  clear 
that  the  Allied  and  Associated  Nations  ought  to  share  fully  and 
equitably  this  expense,  in  accordance  with  the  share  of  work  which 
each  had  undertaken  in  behalf  of  the  other,  but  in  most  instances, 
the  facts  were  complicated,  voluminous,  and  somewhat  obscure, 
while  a  proper  basis  for  the  apportionment  of  such  expenses  was 
very  difficult  to  work  out. 

Nearly  a  month  prior  to  the  creation  of  this  Commission,  the  Secre- 
tary of  War  appointed  Chester  W.  Cuthell  as  his  Special  Repre- 
sentative, and  clothed  him  with  full  power  to  organize  a  staff  of 
lawyers  and  accountants  for  the  purpose  of  developing  the  facts  and 
concluding  agreements  in  regard  to  "  the  relations  of  the  War  Depart- 

43 


42  UNITED  STATES  LIQUIDATION   COMMISSION. 

ment  with  the  several  Governments  of  our  European  Allies  growing 
out  of  orders,  purchases,  and  engagements  given  or  arising  in  the 
procurement  of  munitions,  supplies,  and  services  in  thh  country  by- 
such  European  Allies."  Mr.  Cuthell  and  his  staff  had  their  work 
well  under  way  when  this  Commission  was  established,  and  the  mem- 
bers of  the  Commission  conferred  with  him  freely  and  fully  and  took 
measures  for  co-ordinating  his  work  with  theirs  prior  to  their  leaving 
America  for  Europe. 

The  activities  of  Mr.  Cuthell  and  his  staff  have  always  co-ordinated 
with  those  of  the  Commission,  and  through  the  efforts  of  each  to  help 
the  other,  the  effectiveness  of  both  organizations  has  been  materially 
increased. 

All  claims  between  the  War  Department  and  the  Governments  of 
any  of  our  European  Allies  growing  out  of  the  war  and  arising  in 
America  were  fully  developed  and  presented  by  Mr.  Cuthell  and  the 
members  of  his  staff,  either  in  America  or  in  Europe.  In  this  work, 
Mr.  Cuthell  had  the  assistance  and  co-operation  of  the  Commission. 
The  claims  which  he  established  against  the  French  Government  were 
made  a  part  of  the  final  accounting  by  this  Commission  in  its  "  Gen- 
eral Settlement"  with  that  government.  All  claims  of  this  nature 
between  the  War  Department  and  our  European  Allies,  or  their 
nationals,  which  arose  in  Europe,  were  developed,  studied,  and  dis- 
posed of  by  the  Commission.  Mr.  Cuthell  and  his  assistants  have 
acted  as  the  Commission's  representatives  in  Washington,  and  as 
such  have  rendered  invaluable  services. 

The  following  pages  will  present  a  brief  record  of  the  more  im- 
portant settlements  which  the  Commission  made  in  Europe : 

SETTLEMENTS  WITH  GREAT  BRITAIN. 

On  March  10  and  11,  1919,  the  chairman  of  the  Commission  and 
Mr.  Stettinius  held  several  conferences  in  London  with  representa- 
tives of  the  British  war  office  and  the  British  ministry  of  munitions, 
at  which  the  more  important  claims  of  Great  Britain  against  America 
were  considered.  Particular  attention  was  given  to  the  claim  grow- 
ing out  of  the  cancellation  by  America  of  the  contract,  in  terms  of 
which  Great  Britain  had  agreed  to  produce  and  furnish  certain  ar- 
tillery and  artillery  ammunition.  Mr.  Stettinius  had  already  held  a 
series  of  conferences  with  the  British  on  this  and  other  matters. 

At  these  March  conferences  certain  fundamental  principles  were 
recognized  by  both  parties  as  standards  by  which  mutual  claims 
should  be  measured.  The  chairman  had,  before  leaving  Washington, 
discussed  these  principles  Avith  Mr.  Cuthell.  They  may  be  summar- 
ized in  general  terms  as  follows : 


UNITED  STATES  LIQUIDATION   COMMISSION.  43 

1.  Neither  government  shall,  in  connection  with  any  war  contract 
or  transaction,  make  a  profit  out  of  the  other,  and  this  principle 
shall  be  applied  regardless  of  prices,  tentative  or  fixed,  named  in 
contracts.  Actual  cost  shall  control  in  fixing  prices  between  the 
two  governments,  and  there  shall  be  neither  profit  nor  loss  as  between 
them. 

2.  An  agreement,  whether  written  or  oral,  regular  or  irregular,  if 
clearly  established  between  the  authorized  representatives  of  the  re- 
spective governments,  shall  be  binding  on  both. 

3.  In  the  absence  of  a  definite  agreement,  where  it  is  clearly  es- 
tablished that  one  government,  at  the  request  or  on  the  suggestion 
and  with  the  advice  and  consent  of  the  other,  incurred  obligations 
for  the  common  benefit  of  both,  the  expense  should  be  shared  by 
€ach  party  in  proportion  to  its  benefits,  past  or  prospective. 

In  a  letter  written  by  the  chairman  to  the  British  representa- 
tives, confirming  the  London  interview,  the  following  language  was 
used : 

It  is  understood  that  the  broad,  general  principles  which  have  been  recog- 
nized by  both  governments  in  reaching  the  adjustments  above  outlined  shall 
obtain  in  the  settlement  of  claims  of  like  nature  which  will  be  presented  by  the 
United  States  Government  to  the  British  Government  for  payment,  including 
claims  growing  out  of  the  creation  of  facilities  for  the  manufacture  of,  as  well 
as  expenditures  made  for  the  production  of,  Liberty  motors,  nitrocellulose 
powder,  cotton  linters,  etc. 

This  statement  was  made  by  way  of  assistance  to  Mr.  Cuthell,  who 
was  engaged  at  that  time  in  Washington  on  the  preparation  of  the 
claims  against  England  referred  to. 

The  fact  that  these  simple  principles  were  kept  constantly  in  mind 
in  all  of  our  dealings  with  the  representatives  of  Grreat  Britain  has 
enabled  both  parties  to  reach  sound  solutions  of  many  difficult  prob- 
lems ;  and,  on  the  whole,  it  is  believed  that  the  cordial  relations  be- 
tween the  respective  governments  and  peoples  have  been  cemented 
rather  than  strained  by  the  negotiations  which  have  taken  place. 

BRITISH  ARTILLERY  AND  AMMUNITION  SETTLEMENT. 

From  time  to  time  during  the  spring  and  summer  of  1918  America 
placed  orders  with  Great  Britain  to  manufacture  or  cause  to  be 
manufactured  and  delivered  to  America  certain  quantities  of  artil- 
lery and  artillery  ammunition.  All  such  agreements,  some  of  which 
were  vague  and  indefinite  and  might  have  been  so  construed  as  to 
have  given  them  far-reaching  importance,  were  merged  and  super- 
seded by  a  certain  agreement,  dated  October  19,  1918,  entered  into 


44  UNITED  STATES  LIQUIDATION   COMMISSION. 

between  Mr.  Stettinius,  Special  Representative  of  the  Secretary  of 
War,  and  Mr.  Churchill,  British  Minister  of  Munitions.^^ 

Immediately  after  the  armistice,  Mr.  Stettinius  gave  notice  of  the 
cancellation  of  the  contract  and  at  once  began  negotiations  with  a 
view^  to  reaching  a  fair  and  equitable  settlement  for  losses  occasioned 
thereby.  The  negotiations  which  were  merged  in  the  agreement  of 
October  19,  1918,  covered  a  considerable  period  and  it  was  clear  that 
the  British  manufacturing  operations  had  been  maintained,  and  that 
she  had  made  plans  for  increased  production,  in  order  to  meet 
America's  demands.  A  large  part  of  the  material  contracted  for 
had  already  been  produced  and  a  majority  of  the  remainder  was  in 
process.  Mr.  Stettinius  conducted  his  negotiations  on  the  assump- 
tion that,  as  a  large  part  of  these  materials  were  already  in  being  and 
were  in  excess  of  the  British  requirements,  it  would  be  to  America's 
interest  to  accept  completed  guns,  equipment,  and  ammunition  rather 
than  to  pay  large  indemnities  and  receive  nothing  in  return. 

After  consulting  with  our  ordnance  officials  in  London,  Paris,  and 
Washington  with  a  view  to  determining  Avhat  ordnance  equipment 
could  be  used  to  the  best  advantage  by  our  War  Department,  Mr. 
Stettinius  asked  the  British  for  a  revision  and  adjustment  of  the 
contract,  in  terms  of  which  the  number  of  guns  of  small  caliber  to  be 
taken  by  us  were  to  be  reduced,  and  in  lieu  of  this,  the  number  of 
large-caliber  guns  slightly  increased.  A  tentative  understanding  in 
general  terms  had  been  reached  between  Mr.  Stettinius  and  the 
British  ministry  when  the  chairman  of  the  Commission  took  up  the 
case.  .  At  the  conferences  held  in  March,  the  chairman  reached  a 
tentative  agreement  which  was  presented  to  and  approved  by  the 
full  Commission  in  Paris  a  few  days  later.  This  agreement  was  con- 
firmed by  the  chairman's  letter  to  the  British  representative,  dated 
March  21,  1919,  setting  forth  the  number  and  types  of  artillery  units 
and  ammunition,  the  delivery  of  which  America  agreed  to  accept 
and  for  which  it  agreed  to  pay  on  the  basis  of  cost  to  Great  Britain, 
in  lieu  of  the  payment  of  cancellation  damages.  It  was  further 
agreed  that  deliveries  might  begin  at  once  in  order  to  relieve  the  con- 
gestion at  British  arsenals  and  manufacturing  plants  and  in  order 
to  utilize  available  shipping,  and  that  a  final  contract  would  be  pre- 
pared and  executed  as  soon  as  the  definite  unit  costs  could  be  pro- 
cured by  the  British  and  verified  by  the  ordnance  representatives  of 

^The  entire  course  of  those  negotiations  is  very  carefully  recorded  in  two  type- 
written volumes  in  the  Commission's  files  entitled,  respectively  :  (1)  "  R6sum6  of  negotia- 
tions Conducted  by  Mr.  Edward  R.  Stettinius  with  the  French  and  British  Governments  "  ; 
and  (2)  "  R6sum6  of  negotiations  conducted  by  the  United  States  Liquidation  Commis- 
sion— War  Department  with  the  British  Government  for  the  settlement  of  obligations  of 
the  United  States  consequent  upon  the  purchase  of  artillery  and  artillery  ammunition, 
Paris,  Aug.  28,  1910." 


UNITED  STATES  LIQUIDATION   COMMISSION. 


45 


the    American    Expeditionary    Forces.     The    formal    contract    was 
signed  August  9,  1919.-^ 

Under  the  terms  of  this  contract,  Great  Britain  has  delivered,  or 
will  deliver,  to  the  United  States  the  following  guns,  gun  equipment, 
and  artillery  ammunition : 

GUN  EQUIPMENT. 


Nature. 


Cost  per  unit. 


Number 
of  units. 


Total 
value. 


8-inch  howitzer,  Mark  VII 

8-inch  howitzer,  Mark  VI 

6-inch  gun,  Mark  XIX 

6-inch  gun  bodies  complete  with  breech  mechanisms 
60-pounder  gun 


£ 
6,295 
6,390 
6,374 
2,060 
5,210 


84 
64 

100 
50 

200 


£528,780 
408,960 
637,400 
103,000 

1,042,000 


2,720.140 


GUN  AMMUNITION. 


£.    s.     d. 

13  10  0 
9    15    0 

10  5  0 
6  0  0 
6  3  4 
5  5  0 
5    10    0 

1  170,000 
125,000 
125,000 
2  33,500 
2  33,500 
166,500 
166,500 

£2,295,000 
243, 750 

6-inch  gun  high  explosive                                       . .     .          

Shrapnel 

256,250 

60-pounder  high  explosive .' 

201,000 

Shrapnel .    . 

206,583 
349, 125 

High  explosive •. 

Shrapnel 

365, 750 

Total 

3,917,458 

Grand  total 

6  637,598 

1  Compt.  2  Com.  rds. 

America  pays  no  indemnities  for  cancellation  of  the  original  artil- 
lery and  artillery  ammunition  contract  of  October  19,  1918,  but  pays 
actual  cost  for  the  guns  and  ammunition  purchased  under  the  terms 
of  this  settlement  of  August  9,  1919.  The  total  payment  has  been 
finally  determined  at  £6,637,598.  When  the  contract  was  signed  90 
per  cent  of  this  amount  was  paid  in  cash,  5  per  cent  additional  will 
be  paid  upon  the  completion  of  deliveries  of  the  guns  and  ammuni- 
tion, and  the  remaining  5  per  cent  upon  the  completion  of  deliveries 
of  the  spare  parts. 

AUSTRALIAN   WOOL  SETTLEMENT. 

During  the  war  the  British  Government  made  contracts  with  the 
governments  of  Australia  and  New  Zealand  for  large  supplies  of 
wool  produced  by  them.  This  was  obviously  done  with  a  view  to 
financing  and  stimulating  production  when  shipping  was  precarious 
and  when  the  Allied  Governments  were  in  great  need  of  wool.  In 
October,  191T,  our  War  Departmet  contracted  with  the  British  Gov- 
ernment for  the  purchase  of  247,000  bales  of  wool  for  delivery  in 

28  gee  Appendix  XVIII  for  copy  of  (1)  the  final  artillery  and  artillery  ammunition  con- 
tract of  settlement  with  Great  Britain,  dated  Aug.  9,  1919,  together  with  (2)  the  covering 
letter  written  by  the  Commission's  chairman. 


46  UNITED  STATES  LIQUIDATION   COMMISSION. 

Australia  during  the  summer  of  1918.  In  the  late  summer  and  early 
fall  of  1918  negotiations  were  opened  in  London  for  the  purchase 
by  America  of  additional  wool,  and  on  November  7,  1918,  a  contract 
was  signed  in  London  between  Great  Britain  and  America  (the  lat- 
ter acting  through  Messrs.  Summers  and  Patterson,  of  the  War  In- 
dustries Board)  whereby  Great  Britain  sold  to  America  325,000  addi- 
tional bales  of  Australian  wool. 

The  entire  amount  purchased  under  the  first  contract  had  been 
shipped  to  the  United  States  during  the  war  and  approximately 
115,000  bales  had  been  delivered  under  the  second  contract  before 
this  Commission  came  into  the  situation.  The  Commission  found 
that  with  the  coming  of  the  armistice  the  War  and  Navy  Depart- 
ments of  the  United  States  had  stocks  of  wool  not  only  in  excess  of 
their  own  needs  but  in  excess  of  the  requirements  of  our  civilian 
population  and  in  excess  of  what  our  markets  could  advantageously 
absorb  at  that  time.  The  chairman  of  the  Commission,  therefore, 
accompanied  by  Mr.  Cuthell,  visited  London,  and  in  conference  with 
Lord  Inverforth,  minister  of  supplies.  Sir  Arthur  Goldfinch,  British 
wool  expert,  W.  T.  Layton,  and  others,  urged  that  America  be 
relieved  of  its  obligation  to  accept  the  remaining  210,000  bales  under 
the  contract  of  November  7,  1918.  The  British  representatives  were 
very  insistent  that  America  should  take  and  pay  for  this  wool  with- 
out delay. 

Upon  studying  the  contracts  and  correspondence  connected  with 
the  whole  series  of  wool  transactions,  some  ambiguities  were  discov- 
ered. The  British  Government  had  two  schedules  of  prices  at  which 
it  sold  wool — one  the  "civil  issues  price,"  upon  which  it  made  a 
profit  to  cover  the  risk  it  was  taking,  overhead  and  other  expenses; 
the  other  the  "military  price,"  designed  to  represent  cost  to  Great 
Britain,  and  at  which  wool  was  issued  to  the  British  Army.  Sir 
Arthur  Goldfinch,  who  had  negotiated  the  sales  in  behalf  of  Great 
Britain,  insisted  with  great  earnestness  that  the  contracts  provided 
in  substance  that  America  should  pay  for  all  of  the  wool  purchased 
by  it  at  the  civil  issues  price,  and  that  it  was  proper  that  America 
should  so  pay  because  she  did  not  participate  with  Great  Britain  in 
the  risk  of  the  purchase  of  the  entire  clip.  On  the  other  hand,  the 
chairman,  without  admitting  the  construction  placed  on  the  con- 
tracts by  Great  Britain,  earnestly  contended  that  even  if  the  British 
construction  of  the  contract  was  correct.  Great  Britain  should  not 
insist  on  the  terms  of  the  contract  which  would  result  in  its  making 
a  profit  out  of  America  on  wool  purchased  for  war  purposes,  and  in 
furtherance  of  the  cause  in  which  Great  Britain  and  America  had 
joined  forces. 

As  a  result  of  these  conferences  and  debates,  which  consumed  the 
better  part  of  two  days,  and  in  which  Mr.  Cuthell  and  Mr.  Elliott 


UNITED  STATES  LIQUIDATION   COMMISSION.  47 

(the  latter  being  the  wool  expert  of  the  Purchase,  Storage  and  Traffic 
Division  of  the  War  Department)  participated,  an  agreement  was 
reached  substantially  as  follows :  ^^ 

1.  America  agreed  to  pay  for  all  of  the  wool  purchased  under  the 
contract  of  October  1,  1917,  on  the  basis  of  the  civil  issues  price  less 
2J  pence  a  pound,  in  accordance  with  bills  already  rendered,  cover- 
ing approximately  247,000  bales. 

2.  America  agreed  to  pay  the  bills  rendered  by  Great  Britain  for 
storage  and  insurance  in  Australia,  and  for  interest  on  delayed  pay- 
ments under  this  contract,  amounting  approximately  to  $850,000. 

3.  America  agreed  to  pay  for  the  115,000  bales  already  shipped 
under  the  contract  of  November  7,  1918,  on  the  basis  of  the  civil 
issues  price  less  2J  pence  a  pound  in  accordance  with  the  bills  already 
rendered,  plus  a  payment  of  1  penny  per  pound  premium  for  selec- 
tion in  accordance  with  the  terms  of  the  contract. 

4.  Great  Britain  cancelled  without  cost  to  America  all  obligations 
on  our  part  to  take  delivery  of  that  portion  of  the  wool  which 
remained  undelivered  under  the  contract  of  November  7,  1918, 
amounting  to  approximately  210,000  bales. 

5.  Great  Britain  waived  all  claims  for  interest  and  storage  against 
America  covering  the  wool  undelivered  under  the  contract  of  Novem- 
ber 7,  1918. 

This  was  believed  by  all  interested  parties  to  have  been  a  most 
advantageous  contract  from  the  American  point  of  view.  It  re- 
lieved the  War  Department  of  an  obligation  to  take  a  large  amount 
of  wool  for  which  it  had  no  use  and  which  American  markets  were 
unable  to  absorb  within  any  reasonable  time,  and  for  which  America 
would  have  been  required  to  pay  in  cash  approximately  $38,800,000. 

THE  CUTHELL  SETTLEMENT. 

As  heretofore  pointed  out,  Chester  W.  Cuthell,  special  repre- 
sentative of  the  Secretary  of  War,  and  his  staff  were  responsible  for 
the  development  and  presentation  of  claims  of  the  War  Department 
against  Allied  Governments  arising  in  America.  How  thoroughly 
and  effectively  this  work  was  done  by  Mr.  Cuthell  and  the  members  of 
his  staff  is  illustrated  by  the  manner  in  which  they  presented,  in 
May,  1919,  to  the  British  authorities  in  London  and  procured  allow- 
ances of  five  controverted  claims  aggregating  in  amount  over 
$35,000,000.  While  the  chairman  of  the  Commission  participated  in 
these  conferences  and  the  contract  of  settlement  was  ratified  and  ap- 
proved by  a  vote  of  the  Commission,  it  is  nevertheless  the  privilege, 
as  well  as  the  pleasure,  of  the  Commission's  chairman  to  bear  testi- 
mony to  the  fact  that  the  full  credit  for  the  preparation  and  estab- 

2*  See  Appendix  XIX  for  the  Australian  wool  settlement,  which  is  paragraph  6  of  the 
Cuthell  settlement  with  Great  Britain,  dated  May  10,  1919,  signed  by  C.  W.  Cuthell 
and  Lord  Inverforth. 


48  UNITED  STATES  LIQUIDATION   COMMISSION. 

lishment  of  these  claims  belongs  to  Mr.  Cuthell  and  the  members  of 
his  staff. 

After  conferences  lasting  for  only  a  little  more  than  a  week, 
these  claims,  as  presented  to  Great  Britain,  were  established  and 
allowed  as  follows  i^"^ 

Spruce,  fir,  and  cedar $13,274,550.20 

Wood   distillates 2,887,554.00 

Liberty    motors 13,  964,  718.  90 

Nitrocellulose  powder 4,  690,  500.  00 

Cotton  linters 651,  500.  00 

35,  468,  823. 10 
SETTLEMENT  OF  TANK  AGREEMENTS. 

In  the  fall  of  1917  Great  Britain  and  the  United  States  appointed 
a  joint  commission  to  study  the  question  of  the  most  desirable  types 
of  tanks  and  the  question  of  their  production.  A  conference  was 
held  in  Paris  in  December,  1917,  the  United  States  being  repre- 
sented by  Col.  House  and  others,  England  by  Mr.  Churchill  and 
others,  and  France  by  M.  Loucheur  and  others. 

At  this  conference  the  desirability  of  producing  heavy  tanks  on 
a  large  scale,  the  parts  to  be  made  in  the  several  countries  and  the 
assembling  plant  to  be  built  in  France,  was  discussed  at  length 
and  agreed  to  in  principle.  France,  however,  because  she  was 
already  producing  light  tanks  in  great  quantities,  declined  to  enter 
into  a  triangular  agreement  for  financing  and  forwarding  such  a 
proposition,  but  she  agreed  to  assist  the  other  two  nations  in  acquir- 
ing a  site  for  the  assembling  plant  and  in  other  ways  within  her 
power.  She  did  not  ask  for  any  part  of  the  output  of  the  plant  at 
this  time. 

On  the  22d  of  January,  1918,  an  agreement  was  signed  between  the 
United  'States  and  the  British  Government,  creating  an  Anglo- 
American  commission,  which  was  charged  with  building  a  tank- 
assembling  plant  in  France  with  a  capacity  of  300  tanks  per  month 
and  capable  of  being  extended  to  1,200  per  month ;  1,500  tanks  to  be 
produced  during  the  year  1918.  This  assembling  plant  was  built 
at  Chateauroux,  Neuvy-Pailloux,  and  is  usually  spoken  of  as  the 
"  Chateauroux  plant."  The  component  parts  of  the  tanks  were  to  be 
produced  about  half  in  England  and  half  in  the  United  States,  Eng- 
land supplying  plates,  structural  members,  track  shoes,  guns,  ammu- 
nition, etc.,  and  the  United  States  supplying  engines  complete,  motor 

^  Copy  of  Cuthell-Inverforth  agreement,  together  with  an  explanation  of  the  matters 
involved  in  this  settlement  is  found  in  Mr.  Cuthell's  report  to  the  Secretary  of  War.  dated 
Sept.  30,  1919,  which  is  quoted  in  full  in  the  Annual  Report  of  the  Secretary  of  War, 
1919,  pp.  105,  106,  117-120. 


UNITED  STATES  LIQUIDATIOlsT   COMMISSION.  49 

parts,  sprockets,  hubs,  shafts,  track  rollers,  track  lengths,  etc.  The 
expenditures  of  the  entire  undertaking,  including  the  building  of 
the  factory  in  France,  the  production  of  the  components,  and  all 
other  matters  directly  connected  with  the  work,  were  to  be  shared 
equally  by  the  two  Governments.  Completed  tanks  were  to  be  sold 
to  the  French,  British,  or  Americans  at  £5,000  each,  this  price  being 
subject  to  adjustment  when  the  project  should  be  liquidated  at  the 
close  of  the  war.  After  the  undertaking  was  well  under  way, 
France,  through  the  Interallied  Munitions  Council,  earnestly  in- 
sisted that  the  cause  of  the  Allies  required  that  the  majority  of  the 
large  tanks  to  be  assembled  at  the  Chateauroux  plant  should  be  allo- 
cated to  her.  After  much  discussion,  it  was  reluctantly  agreed  that 
France  and  the  United  States  should  share  equally  the  tanks  as  pro- 
duced until  the  first  1,200  had  been  finished  and  that  the  next  300 
should  be  allocated  to  France.  This  understanding  was  never  re- 
duced to  writing  as  a  formal  agreement,  nor  was  any  agreement 
ever  made  with  regard  to  the  allocation  of  tanks  in  excess  of  the  first 
1,500  to  be  produced. 

The  Chateauroux  plant  was  never  quite  finished  and  no  tanks  were 
ever  assembled  there.  Immediately  after  November  11,  1918,  work 
on  the  whole  project  was  discontinued  and  conversations  began  with 
a  view  to  reaching  a  settlement  in  liquidation  of  the  affairs  of  this 
enterprise.  Approximately  24,000,000  francs  had  been  expended  on 
the  erection  of  the  assembling  plant  for  substantially  one-half  of 
which  the  United  States  was  indebted  to  Great  Britain.  The  amount 
which  the  United  States  and  Great  Britain  had  each  expended  in 
the  manufacture  of  components  has  been  estimated  as  approximately 
£3,000,000.  France  had  invested  nothing  in  the  enterprise,  although, 
as  noted  above,  she  was  to  receive  nine- fifteenths  of  the  first  year's 
output. 

The  liquidation  of  this  undertaking  was  discussed  by  the  Com- 
mission's chairman  and  Mr.  Stettinius  with  the  representatives  of 
the  British  Government  in  London  early  in  March,  1919,  and  a 
tentative  agreement  in  general  terms  was  reached.  This  agreement 
was  reduced  to  writing,  and  formally  executed  under  date  of 
August  8,  1919.2« 

The  contract  provided  that  the  losses  sustained  by  the  two  Govern- 
ments in  the  manufacture  of  tank  components  should  be  considered 
as  offsetting  each  other,  and  that  neither  Government  should  bill  the 
other,  nor  bill  the  Anglo-American  Commission  for  any  of  them. 
The  cost  of  erecting  the  assembling  plant,  and  all  expenses  in  connec- 
tion with  that  undertaking  were  shared  equally  between  the  two  Gov- 

2«  See  Appendix  XX  for  a  copy  of  the  "  Chateauroux  tank  agreement "  of  Aug,  8, 
1919. 

183176—20 4 


50  UNITED  STATES  LIQUIDATION   COMMISSION. 

ernments.  Nothing  remained,  therefore,  to  complete  the  liquidation 
save  the  disposition  of  the  assembling  plant,  and  the  presentation  to 
France  of  the  equitable  claim  growing  out  of  the  allocation  to  her  ot 
nine-fifteenths  of  the  first  year's  production.  It  Avas  believed  by 
Great  Britain  and  the  United  States  that  the  most  satisfactory  form 
in  which  to  present  this  claim  to  France  was  to  ask  her  to  purchase 
and  take  over  the  plant  with  all  rights  and  obligations  pertaining  to 
it  and  pay  on  the  transaction  a  sum  sufficient  to  cover  the  purchase 
price,  and  such  share  of  the  general  loss  as  might  be  determined  to  be 
equitably  chargeable  to  France. 

It  might  seem  fair,  at  first  blush,  for  the  proceeds  of  this  sale  to  be 
divided  equally  between  Great  Britain  and  the  United  States  because 
the  two  Governments  had  shared  equally  in  all  the  expenses  of  con- 
structing the  plant.  Great  Britain,  however,  contended  with  much 
plausibility  that  because  she  had  relinquished  to  France  her  allocation 
of  750  tanks  (one-half  of  the  first  year's  output),  and  because 
America  had  relinquished  only  150  tanks;  the  major  portion  of  the 
pajnnent  from  France  should  go  to  England,  in  so  far  as  it  was  a  con- 
tribution to  the  general  loss,  and  not  a  payment  for  the  value  of  the 
plant. 

Without  settling  the  point  with  England  concerning  the  division 
of  the  proceeds,  the  Commission  joined  with  the  representatives  of 
Great  Britain  in  presenting  the  claim,  through  M.  Loucheur,  to  the 
French  Government.  M.  Loucheur,  in  his  answer,  argued  that  the 
French  understanding  of  the  whole  tank  situation  was  that,  while 
the  English  and  American  Governments  had  been  planning  to  con- 
centrate on  the  production  of  heav^^  tanks,  the  French  Government 
was  making  large  expenditures  in  concentrating  on  the  production  of 
light  tanks,  and  that,  while  the  French  Government  would  have  re- 
ceived heavy  tanks  from  the  Anglo-American  Commission,  both  the 
English  and  American  Governments  would,  in  turn,  have  received 
light  tanks  from  the  French  Government.  He  contended  further 
that  no  more  definite  agreement  had  been  reached  to  the  effect  that 
France  should  get  heavy  tanks  than  to  the  effect  that  England  and 
America  should  get  light  tanks;  that  the  moral  force  of  one  claim 
was  as  strong  as  the  other. 

After  this  answer  had  been  carefully  examined  by  the  representa- 
tives of  Great  Britain  and  by  this  Commission,  negotiations  were 
re-opened  with  M.  Loucheur,  which  finally  resulted  in  an  agreement 
by  the  French  Government  to  pay  20,000,000  francs  in  settlement  of 
the  claim,  France  taking  over  the  Chateauroux  plant  with  all  rights 
and  liabilities  relating  thereto  at  the  time  of  the  contract.  It  was 
estimated  that  the  net  salvage  value  of  the  Chateauroux  plant  was 
5,000,000  francs,  so  that  15,000,000  francs  might  be  considered  as  in- 


UNITED  STATES  LIQUIDATION   COMMISSION.  51 

demnity  paid  by  the  French  as  their  share  of  the  losses  connected 
with  the  undertaking. 

It  was  clear  that  England  was  entitled  to  a  larger  share  of  this 
indemnity  than  the  United  States,  because  she  was  to  receive  no  tanks 
during  the  first  year  of  the  plant's  operation,  having  relinquished 
her  entire  share  to  the  French.  Of  the  900  tanks  which  France 
would  have  received  from  the  first  year's  production,  England  would 
have  contributed  750,  or  five-sixths,  and  America  150,  or  one-sixth. 
England  contended  that  while  it  was  proper  to  divide  the  5,000,000 
francs  equalh^  between  the  two  Governments,  the  15,000,000  francs 
should  be  divided  five-sixths  to  England  and  one-sixth  to  the  United 
States.  The  Commission  finally  agreed  with  Great  Britain  that  the 
20,000,000  francs  received  from  France  should  be  divided,  70  per 
cent,  or  14,000,000  francs,  to  Great  Britain,  and  30  per  cent,  or 
6,000,000  francs  to  the  United  Spates.  On  October  4,  1919,  a  final 
contract  was  signed  with  Great  Britain  providing  for  a  complete 
liquidation  of  the  affairs  of  the  Anglo-American  [Tank]  Commission, 
and  providing  in  detail  for  a  distribution  of  funds  and  settlement 
of  account.^ 

Another  matter  arose  in  connection  with  this  settlement.  It  will 
be  remembered  that  under  the  Anglo-American  agreement  certain 
tank  parts  were  being  made"  in  the  United  States  and  other  parts  in 
England  while  shipments  were  to  be  made  to  France  where  the 
tanks  would  have  been  assembled.  Our  War  Department  in  Wash- 
ington decided  that  it  would  be  desirable  to  use  some  of  the  com- 
ponents already  produced  under  this  agreement  for  the  manufac- 
ture of  tanks  for  training  and  edvicational  purposes.  The  British 
Government  was  approached  by  the  chairman  of  the  Commission  and 
it  consented  to  turn  over  to  us,  at  a  salvage  price,  tank  parts  suf- 
ficient to  enable  us  to  produce  105  tanks.  England  estimated  that 
her  share  of  the  components  for  one  tank  had  cost  about  £5,000, 
but  because  tank  components  had  little  more  than  salvage  value  to 
her  after  the  Avar  she  was  glad  to  offer  America  these  parts  at 
slightly  over  £1,000  per  tank.  The  total  bill  for  this  purchase 
amounted  to  £105,786  7s.'' 

There  was  one  more  tank  transaction  which  remained  to  be  settled. 
Some  time  before  November  11,  1918,  Great  Britain  had  supplied  to 

27  See  Appendix  XXI  for  (1)  a  copy  of  the  contract  of  final  settlement  of  the 
Chateauroux  tank  project,  dated  Oct.  4,  1919  ;  (2)  a  copy  of  memorandum  prepared  by 
M.  Loucheur  and  signed  by  Loucheur  and  Morel,  on  behalf  of  the  French  Government ;  by 
C.  C.  Barry  and  F.  W.  Phillips,  on  behalf  of  Great  Britain  ;  and  by  Edwin  B.  Parker,  on 
behalf  of  the  United  States,  dated  Oct.  9,  1919^ 

28  A  full  account  of  all  the  negotiations  carried  on  in  connection  with  the  settlement 
of  the  Anglo-American  agreement  is  contained  in  a  typewritten  volume  in  the  Commis- 
sion's files,  styled  *'  R6sum6  of  negotiations  conducted  by  United  States  Liquidation 
Commission  with  the  British  and  French  Governments  In  the  final  settlement  of  the 
Anglo-American  agreement  and  the  purchase  of  British  tank  components,"  dated  Paris, 
Auer.  28.  1919. 


52  UNITED  STATES  LIQUIDATION   COMMISSION. 

the  301st  Tank  Battalion,  United  States  Army,  64  tanks  of  various 
marks,  complete  with  armament  and  equipment.  These  tanks  were 
used  in  fighting  while  this  battalion  was  brigaded  with  the  British 
Army.  The  British  supplied  spare  parts  as  they  were  needed.  After 
the  war,  14  of  these  tanks  were  shipped  to  the  United  States  and 
the  remaining  50  were  returned  to  Great  Britain.  A  portion  of 
them  had  been  damaged  in  action.  The  Commission  agreed,  by  a  con- 
tract dated  August  11,  1919,  that  the  United  States  should  keep  the 
14  tanks,  the  British  should  keep  the  50  tanks,  and  that  the  whole 
matter  should  be  settled  by  a  payment  to  Great  Britain  of  £189,233 
2s.  lid. 

BRITISH  LIBERTY  MOTOR  SETTLEMENT. 

Under  the  Cuthell-Inverforth  agreement  of  May  10, 1919,^9  the  War 
Department  of  the  United  States  was  obliged  to  continue  its  deliveries 
of  Liberty  motors  to  England  until  the  total  should  reach  2,252 
motors.  These  deliveries  were  completed  out  of  the  surplus  Liberty 
motors  which  we  had  in  our  possession  in  France  and  which  were 
not  needed  to  satisfy  our  obligation  under  the  final  aircraft  settle- 
ment with  the  French  Government. 

BRITISH    INTEREST     CLAIM. 

Prior  to  the  creation  of  the  Commission,  the  British  Government 
had  presented  to  the  American  Expeditionary  Forces  a  claim  for 
interest  on  money  invested  by  the  British  in  stocks  which  had  been 
sold  afterwards  to  the  United  States  at  cost  and  also  a  claim  for 
interest  on  bills  payment  of  which  had  been  delayed  more  than  one 
month.  These  claims  had  already  been  tentatively  recognized  by 
the  American  military  authorities  and  were  among  the  first  im- 
portant matters  with  which  the  Commission  was  called  upon  to  deal, 
the  chairman  making  his  first  examination  of  them  during  his  visit 
to  London  early  in  March. 

The  British  claimed  that  interest  on  investments  made  by  them  in 
stocks  afterwards  sold  to  us  should  begin  to  accrue  from  the  date  of 
the  investment  by  the  British  in  such  stocks  irrespective  of  the  date 
of  the  bill  or  invoice.  The  Commission  in  numerous  prolonged  con- 
ferences protested  against  payment  of  interest  for  any  period  previ- 
ous to  the  presentation  of  a  proper  bill. 

The  position  which  the  British  took  was  that  our  contention  would 
be  sound  under  ordinary  conditions,  but  that  the  exigencies  of  war 
made  conditions  abnormal,  and  that  they  ought  not  to  lose  the  interest 
on  capital  which  they  had  invested  for  us  merely  because  they  had 

»  See  Appendix  XXII  for  the  text  of  section  3  "  Liberty  motors  and  proper  proportion 
of  sets  of  spare  parts  "  of  the  Cuthell-Inverforth  agreement  of  May  10,  1919. 


UNITED  STATES  LIQUIDATION  COMMISSION.  53 

not  paused  in  the  process  of  waging  war  for  the  purpose  of  rendering 
bills.  They  claimed  that,  if  America  was  unwilling  to  consider  inter- 
est from  the  date  of  the  investment  by  the  British,  at  least  we  should 
pay  interest  from  the  date  of  delivery.  They  further  pointed  out 
that,  during  all  of  this  time,  they  were  borrowing  money  from 
America  and  paying  interest  on  it  from  the  date  when  the  credit 
was  extended,  and  that  an  important  part  of  this  same  money  had 
been  paid  out  for  the  very  materials  and  supplies  which  they  had 
delivered  to  us. 

Numerous  objections  to  this  claim  were  put  forward  by  the  Com- 
mission and  it  would  not  be  profitable  to  rehearse  them  here.  It  is 
enough  to  say  that  the  fact  was  clearly  developed  that  there  had 
been  unreasonable  delays  by  each  party  in  the  payment  of  bills. 
The  British  finally  abandoned  their  claim  for  interest  on  invest- 
ments covering  periods  prior  to  the  rendition  of  bills;  and  it  was 
finally  agreed  that  interest  at  the  rate  of  5  per  cent  per  annum  should 
be  paid  by  each  party  on  every  proper  bill  which  had  been  rendered 
by  the  other  and  which  had  been  held  for  a  period  longer  than  a  full 
calendar  month  without  payment,  interest  beginning  to  accrue  on 
the  first  day  of  the  second  month  following  receipt  of  the  bill. 

Careful  studies  were  made  of  all  bills  rendered  by  either  party 
prior  to  July  31,  1919,  and  a  summary  of  these  bills  was  prepared. 
A  balance  was  struck  showing  that  the  British  bills  against  America 
exceeded  the  American  bills  against  the  British  by  £51,062,692  15s. 
5d.  It  was  also  calculated  that  the  average  period  during  which 
all  of  these  British  bills  had  been  held  unpaid  after  they  had  been 
presented  in  proper  form  was  five  and  one-fourth  months.  An 
average  period  of  one  and  one-half  months  being  allowed  as  a 
reasonable  time  for  checking  and  vouchering,  it  was  agreed  that  in- 
terest should  be  computed  at  5  per  cent  per  annum  for  a  period  of 
three  and  three-fourths  months  on  £51,062,692  15s.  5d.,  and  the  re- 
sult, namely  £797,854  lis.  2d.,  should  be  paid  by  America  to  Great 
Britain  in  full,  final,  and  complete  settlement  of  all  mutual  interest 
claims  of  this  nature  accruing  from  the  beginning  of  the  war  to 
and  including  July  31,  1919.    This  sum  has  been  paid.'" 

The  contract  of  settlement  further  provides  that  interest  at  the 
rate  of  5  per  cent  per  annum  shall  begin  to  accrue  October  1,  1919, 
on  all  bills  rendered  prior  to  August  1, 1919,  and  which  have  not  been 
paid  on  October  1,  and,  further,  that  all  bills  rendered  in  the  month 
of  August  which  have  not  been  paid  before  October  1  shall  bear  in- 
terest from  the  latter  date  and  that  on  November  1  interest  shall 
begin  to  accrue  on  all  bills  rendered  during  the  month  of  September 
which  have  not  been  paid  before  November  1.     This  formula  is  to  be 

""See  Appendix  XXIII  for  copy  of  the  contract  settling  the  interest  claims  between 
the  British  and  American  Governments,  dated  Oct.  20,  1919. 


54  UNITED   STATES   LIQUIDATION    COMMISSION. 

followed  until  all  mutual  bills  and  accounts  between  Great  Britain 
and  the  United  States  growing  out  of  the  war  have  been  paid.  It 
will  be  noted  that  this  plan  allows  an  average  period  of  45  days  for 
checking  and  vouchering  bills  before  interest  begins  to  run. 

Bills  are  not  "  rendered  "  for  the  purpose  of  this  contract  until 
they  are  presented  in  a  correct  and  proper  form,  i.  e.,  the  form  in 
which  they  are  ultimately  paid.  A  bill  which  is  delayed  in  pay- 
ment on  account  of  being  returned  for  correction  is  not  "  rendered  •' 
until  presented  again  in  correct  form. 

It  may  be  of  interest  to  note  in  passing  that  measures  were  taken 
by  the  Commission  to  insure  the  prompt  payment  by  the  American 
forces  of  all  proper  bills  rendered  by  the  British  against  them  and 
that  practically  no  interest  is  accruing  at  this  time  nor  has  any  ac- 
crued for  some  months  past.  It  is  also  interesting  to  note  that,  by 
force  of  circumstances  for  which  neither  government  is  censurable, 
America  has  gained  very  much  more  by  reason  of  the  decline  in  the 
rate  of  exchange  than  she  has  lost  by  the  payment  of  interest  for  any 
periods  of  delay. 

LIQUIDATION  OF  THE  NITRATE  POOL. 

In  the  early  part  of  1918  America  agreed  with  (xreat  Britain. 
France,  and  Italy  that  the  purchase  of  nitrate  of  soda,  which  was 
required  in  large  .quantities  by  these  Governments  for  use  in  the. 
manufacture  of  powder  and  explosives,  should  be  allocated  through 
a  "nitrate  executive"  stationed  in  London.  The  world's  supply  of 
nitrate  of  soda  is  located  in  a  small  area  near  the  coast  of  Chile,  and 
its  export  is  controlled  by  the  Chilean  Government.  Purchases  Tvere 
made  from  time  to  time  by  or  for  account  of  the  respective  Govern- 
ments, or  for  importers  under  allocations  made  in  London  by  the 
nitrate  executive. 

Immediately  after  the  armistice  all  importations  from  Chile  to 
the  United  States  were  stopped,  and  the  War  Department  took  ac- 
count of  its  stocks.  It  turned  over  192,000  tons  to  the  Department 
of  Agriculture  for  sale  and  use  in  the  production  of  soil  fertilizers. 
It  placed  300,000  tons  in  War  Department  reserve.  After  these  dis- 
positions it  was  calculated  that  the  surpluses  remaining,  including 
a  small  Navy  Department  surplus,  were  something  OA^er  28,000  tons 
in  the  United  States  and  about  120,000  tons  in  Chile. 

Early  in  December,  1918,  a  tentative  understanding  was  reached 
between  the  British  ministr}^  of  munitions  and  the  American  War 
Department  for  the  formation  of  a  pooling  arrangement,  according 
to  which  the  surplus  stocks  of  nitrate  held  by  the  two  Governments 
might  be  disposed  of.  The  terms  of  this  understanding  were  not 
well  defined,  and  when  the  matter  was  taken  up  with  the  British 
representatives  I)y  the  chairman  of  the  Commission  on  his  visit  to 


UNITED  STATES  LIQUIDATION   COMMISSION.  55 

f^ondon  early  in  March  the  British  were  not  prepared  to  admit  that 
;i  real  "  pool  "  had  been  formed.  After  some  conversation,  however, 
the  existence  of  the  pool  was  admitted  in  principle. 

There  were  several  difficulties  in  the  way  of  a  prompt  disposition 
of  the  stocks  and  conclusion  of  the  affairs  of  the  pool.  The  stocks 
were  widely  scattered.  Some  of  them  were  in  Chile,  some  in  the 
United  States,  some  in  Great  Britain,  and  some  in  Canada.  It  was 
difficult  to  get  accurate  information  about  their  exact  amounts  and 
exact  locations.  More  than  one  department  of  both  Governments 
was  interested  in  the  disposition.  Much  delay  was  incident  to  the 
exchange  of  cables  between  London,  Chile,  Canada,  Washington,  and 
the  Commission. 

Finally,  after  numerous  and  prolonged  conferences,  a  contract  of 
settlement  of  the  entire  controversy  was  executed  as  of  September  15, 
1919,  and  delivered  on  October  29,  1919.^^  This  agreement  provides 
that  the  pool  shall  be  construed  to  exist  to  the  extent  of  participa- 
tion— 

Tons. 

By  the  British  Government,  witli  stocks  of 436,  628 

By  the  United  States  Government,  with  stocks  of 1.57,  396 

Making  a  total  of 594,024 

Of  this  amount  226,173  tons  remained  unsold  on  September  15, 
1919.  This  unsold  surplus  is  bought  by  each  Government  from  the 
"  pool "  under  the  terms  of  the  contract,  the  quantity  purchased  by 
each  being  in  a  ratio  equal  to  the  ratio  of  the  two  contributions.  The 
price  to  be  paid  by  each  Government  and  credited  to  the  "  pool "  is 
8s.  6d.  per  quintal  (22  quintals  equal  1  long  ton)  for  refined  nitrate 
and  8s.  2d.  per  quintal  for  ordinary  nitrate,  plus  $17.50  per  ton  for 
ocean  freight  to  the  United  States  and  140s.  per  ton  to  England,  and 
plus  marine  insurance  charges.  The  stocks  allocated  to  America  in 
this  sale  consist  of  28,376  tons  located  in  the  United  States,  16,598 
tons  located  in  Canada,  and  14,954  tons  located  in  Chile,  or  a  total 
of  59,928  tons.  The  stocks  allocated  to  Great  Britain  consist  of 
58,468  tons  located  in  the  United  Kingdom  and  107,245  tons  located 
in  Chile,  or  a  total  of  165,713  tons.  The  profits  and  losses  of  the  pool 
are  to  be  apportioned  between  the  two  "Governments  according  to  the 
ratio  of  their  contributions  of  nitrate  as  set  down  in  the  schedule 
above. 

Deliveries  are  now  being  made  under  these  allocations.  When  they 
are  complete  it  will  be  necessary  to  make  some  adjustments  in  accord- 
ance with  the  terms  of  the  contract  of  September  15,  1919,  above 

81  See  Appendix  XXIV  for  a  copy  of  the  contract  of  liquidation  of  the  nitrate  pool, 
together  with  a  memorandum  of  the  revised  figures  which  have  finally  been  used  as  the 
basis  for  the  allocation  of  the  stocks.  See  also  minutes  of  Commission  meeting  held  Dec. 
3,  1919,  Minute  Book,  p.  452. 


56  UNITED  STATES  LIQUIDATION  COMMISSION. 

mentioned,  and  then  a  final  statement  can  be  prepared  and  the  liqui- 
dation completed.  This  pooling  arrangement  as  finally  consummated 
will  prove  advantageous  to  America.  It  is  quite  important  that  the 
final  accounting  should  be  done  by  the  War  Department  through  a 
representative  who  is  thoroughly  familiar  with  the  whole  series  of 
transactions.  The  Commission's  files  contain  a  complete  record,  but 
it  is  voluminous. 

BILLS,  ACCOUNTS,  AND  CLAIMS  PENDING  IN  GREAT  BRITAIN. 

Nearly  all  the  bills,  accounts,  and  claims  of  America  against  Great 
Britain  growing  out  of  the  war,  whether  they  arose  in  the  United 
States,  England,  France,  or  elsewhere,  have  been  presented  and  finally 
disposed  of.  There  still  remain,  however,  a  fairly  large  number  of 
bills  to  be  presented  by  Great  Britain  against  America  arising  out 
of  transactions  both  in  England  and  in  France.  It  is  roughly  esti- 
mated that  these  bills  will  aggregate  £5,000,000  at  this  time.  The 
Commission  has  continuously  brought  pressure  to  bear  upon  the 
several  departments  of  the  British  Government  to  induce  them  to 
present  these  bills  in  order  that  a  full,  final  and  complete  mutual 
settlement  of  all  transactions  between  the  two  Governments  growing 
out  of  the  war  might  be  concluded.  It  is  believed,  however,  that 
while  a  large  number  of  these  bills  and  claims  have  been  presented 
and  disposed  of,  they  will  perhaps  not  all  be  rendered  for  several 
months  to  come.  The  British  representatives  have  assigned,  as  the 
reason  of  this  delay,  the  constant  changes  and  wholesale  reductions 
in  the  personnel  of  their  several  departments. 

There  are  three  unliquidated  claims  of  Great  Britain  against 
America  for  very  substantial  amounts  which  are  still  pending.  These 
have  not  yet  been  presented  to  the  Commission  in  anything  like  com- 
plete form.  They  are  still  being  studied  by  British  representatives, 
who  state  that  they  expect  at  an  early  date  to  be  in  a  position  to 
present  them  with  data,  evidence,  and  arguments  in  their  support. 

EXCESS  COSTS  CLAIM. 

The  most  important  one  of  these  pending  claims  has  come  to  be 
known  as  the  "excess  costs"  claim,  or  the  claim  for  "hidden  loss 
on  steel."  During  the  series  of  interviews  which  the  chairman  of 
the  Commission  had  with  the  British  officials  early  in  March,  1919, 
notice  was  informally  given  that  it  was  their  intention  to  present  a 
claim  for  excess  cost  of  steel,  and  that  the  basis  of  this  claim  was 
the  fact  that  the  British  had  billed  America  for  steel  products, 
especially  artillery  and  artillery  ammunition,  using  the  artificially 
low  price  which  had  been  fixed  by  the  British  Government  for  the 


UNITED  STATES  LIQUIDATION  COMMISSION.  57 

issuance  of  steel  to  their  manufacturers,  termed  by  them  "manu- 
facturers' issues  price."  The  British  stated  that  these  bills  against 
America  did  not  take  into  account  subsidies  and  other  elements  of 
cost  which  their  government  had  paid  directly  or  indirectly  for  the 
steel.  They  also  stated  that  it  had  become  necessary  for  them  to 
purchase  steel  in  America  at  a  price  not  only  higher  than  their 
government-fixed  price  but  higher  than  the  actual  cost  of  steel  in 
England,  in  order  that  they  might  be  able  to  supply  the  United 
States  with  products  of  which  steel  formed  a  large  constituent  part. 

In  concluding  the  several  artillery,  ammunition,  and  tank  agree- 
ments referred  to  above,  the  rights  of  Great  Britain  arising  under 
this  "  excess  costs  "  claim  were  specifically  reserved  without  preju- 
dice to  either  party. 

On  August  1,  1919,  the  British  presented  their  first  written  state- 
ment of  this  claim,  showing  the  amount  involved  according  to  their 
accounting  to  be  approximately  £3,770,000.  Among  other  conten- 
tions put  forth  by  them  in  support  of  the  claim,  one  was  to  the  effect 
that,  in  all  America's  purchases  from  Great  Britain  of  finished 
articles  of  which  steel  formed  a  constituent  element,  America  had 
originally  promised  to  replace  the  steel  ton  for  ton  in  Great  Britain. 
They  said  that  the  stocks  containing  steel  had  been  sold  in  great 
quantities  to  America  and  billed  on  the  basis  of  the  British  fixed 
price  of  steel  to  manufacturers;  that,  the  price  of  steel  in  America 
being  much  higher  than  it  was  in  England,  America  was  liable  to 
Great  Britain  for  the  difference  between  these  two  prices  on  all 
steel  purchased  by  the  latter  country  in  the  United  States  because 
such  purchases  were  necessary  to  replace  the  steel  contained  in  prod- 
ucts furnished  to  America.  They  have  sought  to  apply  here  the  prin- 
ciple that,  in  cases  of  reciprocal  supply,  neither  nation  ought  to  make 
a  profit  nor  sustain  a  loss.  In  this  case  they  insist  that  they  have 
lost  money  on  all  steel  products  furnished  to  America  on  the  basis 
of  the  bills  already  rendered. 

The  Commission  has  answered  in  part  that  the  "  replacement  ob- 
ligation "  did  not,  and  was  never  intended  to,  control  or  affect  prices^ 
but  was  entered  into  as  a  measure  of  insurance  to  Great  Britain  that 
■she  would  secure  steel  tonnage  from  America  at  least  equal  to  the 
steel  entering  into  the  products  sold  by  Great  Britain  to  the  United 
States.  When  this  replacement  arrangement  was  agreed  to  neither 
party  was  greatly  concerned  about  prices^  but  both  were  very  much 
concerned  about  the  allocation  of  bottoms  for  steel,  because  all  of 
the  Allies  were  in  great  need  of  tonnage.  It  was  further  pointed 
out  that  the  replacement  obligation  had  been  entirely  cancelled,  with- 
out reservation  or  condition,  by  the  agreement  concluded  between  the 
representatives  of  America  and  Mr.  Churchill,  British  minister  of 
munitions,  in  October,  1918. 


58  UNITED   STATES   LIQUIDATION   COMMISSION. 

The  Commission  took  the  position,  however,  that  it  was  the  wish 
and  purpose  of  America  to  compensate  Great  Britain  for  every  proper 
element  of  cost  which  could  be  definitely  assigned  to  products  sold  to 
America  by  the  British.  With  this  in  view  the  British  representatives 
undertook  to  ascertain  (1)  the  average  loss  on  all  steel  which  the 
British  Government  furnished  to  British  manufacturers  during  the 
year  preceding  November  11,  1918,  the  calculation  being  based  on  the 
difference  between  government  prices  to  manufacturers  and  actual 
cost  to  the  government,  taking  into  account  every  direct  element; 
(2)  the  amount  of  such  steel  which  has  entered  into  products  sold  to 
America  by  Great  Britain;  and  (3)  the  hidden  loss  to  the  British  on 
all  steel  furnished  to  America  as  estimated  in  this  way. 

Such  a  calculation  was  made,  and  a  memorandum  setting  forth  the 
items  making  up  the  costs  w^as  presented  to  the  Commission  by  the 
British  representatives  on  November  10,  1919.  This  memorandum 
furnished  the  basis  of  several  conferences  at  which  the  Commission 
pointed  out  that  some  of  the  items  of  alleged  loss  were  too  remote 
and  indirect  in  their  nature  to  be  considered  as  ''  costs."  An  example 
of  such  indirect  charges  was  an  item  covering  bonuses  paid  by  the 
British  Government  to  manufacturers  of  silica  brick,  for  the  pur- 
pose of  stimulating  their  production,  that  the  brick  might  be  used  in 
the  building  of  furnaces  for  the  production  of  steel  for  the  manu- 
facture of  shells,  some  of  which  were  sold  to  America.  The  Commis- 
sion  pointed  out  how  impracticable  it  would  be  for  each  Govern- 
ment to  trace  every  remote  and  indirect  element  of  cost  which  had  en- 
tered into  the  production  of  materials  furnished  to  the  other.  Atten- 
tion was  called  to  the  fact  that,  under  the  principle  which  Great 
Britain  was  seeking  to  apply  here,  she  might  ask  America  to  par- 
ticipate in  the  subsidy  which  she  had  paid  on  the  bread  which  the 
workers  in  her  steel  mills  had  eaten.  Another  point  which  has  been 
urged  by  us  is  that  Great  Britain  has  not  included  any  item  of  credit 
to  America  for  the  large  sums  collected  by  her  in  the  form  of  excess 
profit  and  war  profit  taxes  from  her  steel  manufacturers. 

The  British  have  urged  that  both  France  and  Italy  have  already 
recognized  the  justice  of  the  principle  for  which  they  are  contending, 
because  these  countries  have  paid  to  Great  Britain  two  sets  of  bills 
on  all  their  purchases  of  steel  products.  One  set  covers  straight  cost 
to  the  manufacturers,  the  other,  or  supplemental,  set  was  based  on  the 
price  paid  by  Great  Britain  for  American  steel  and  represented  a 
"  hidden  loss  "  of  the  character  described  in  the  claim  which  they  are 
now  presenting  against  us. 

The  British  representatives  are  making  additional  studies  of  this 
claim  in  the  light  of  the  objections  which  we  have  urged,  and  they 
promise  to  present  it  again  in  revised  form. 


UNITED  STATES  LIQUIDATION   COMMISSION.  59 

OVERHEAD    EXPENSE    CLAIM. 

Another  important  claim  which  is  still  pending  is  called  the  "  over- 
head expense  claim."  This  matter  arises  out  of  a  general  claim  by 
the  British  Government  for  reimbursement  for  certain  expenses  such 
as  inspection,  storage,  handling,  transportation,  and  insurance,  con- 
nected with  materials  which  the  British  Government  bought  for  us 
from  its  own  nationals  or  sold  to  us  from  its  own  stocks.  The  British 
claim  that  there  have  been  expenses,  in  addition  to  the  face  of  bills 
rendered  by  nationals,  connected  with  handling  this  material  in  our 
behalf  between  the  time  when  it  left  the  contractor  and  the  time 
when  it  came  into  the  hands  of  the  American  Army.  The  problems 
arising  in  connection  with  these  so-called  "  overhead  charges  "  have 
been  solved  and  all  claims  adjusted  with  the  British  ministry  of 
munitions. 

With  the  British  war  office,  however,  the  matter  is  still  unsettled. 
From  July  29  to  August  30,  1919,  the  overhead  expense  items  in  war 
office  bills  were  allowed.  But,  during  August,  the  war  office  gave 
notice  that  they  intended  to  add  4  per  cent,  or  such  part  thereof  as 
might  be  applicable,  to  all  their  overhead  expense  charged  on  bills 
previously  rendered  and  on  all  bills  in  the  future.  As  it  was  be- 
lieved that  it  would  require  a  great  amount  of  unnecessary  work  to 
audit  the  overhead  expenses,  if  they  were  presented  in  detail  by  the 
war  office ;  it  was  agreed  that  the  British  might  present  their  claim 
in  lump-sum  form ;  and,  as  it  was  thought  best  to  make  no  payments 
which  might  interfere  with  this  proposed  arrangement,  a  memo- 
randum was  issued  on  August  30  suspending  all  payments  for  war 
office  overhead  expenses.  This  memorandum  is  still  in  effect.  The 
British  have  presented  their  lump-sum  offer  in  tentative  form,  and 
the  total  claim-  amounts  to  nearly  £1,000,000.  The  Commission  has 
made  it  clear  to  the  British  representatives  that  some  of  the  items  of 
this  claim  can  not  be  considered  because  they  are  too  indirect;  such 
items  for  example  as  pertain  to  Government  administrative  expenses 
or  interest  on  capital  investments.  Other  items  are  believed  to  be 
proper  charges  against  America  and  should  be  allowed  when  they 
are  suitably  presented  and  established. 

SUPPLEMENTAL  CLAIM   FOR  RAILWAY  TRANSPORTATION. 

America  has  paid  Great  Britain  for  the  railway  transportation 
of  troops  and  supplies  at  her  established  military  rates,  payments 
being  made  when  and  as  the  services  were  rendered.  During  the 
w^ar  Great  Britain  made  certain  guaranties  of  income  to  her  railroads 
under  which  she  is  now  being  called  upon  to  pay  substantial  sums. 
A  short  time  ago  she  reached  an  agreement  with  her  railroads  in 


60  UNITED  STATES  LIQUIDATION   COMMISSION. 

terms  of  which  there  is  an  increase  in  the  military  rates  for  the 
transportation  of  troops  and  supplies,  this  increase  being  retroactive 
to  the  extent  that  it  applies  from  April  1,  1919,  forward.  The  sug- 
gestion has  been  made  that  the  British  now  render  supplemental 
bills  against  America  on  the  basis  of  these  increased  rates  covering 
all  items  of  transportation  of  our  troops  and  supplies  since  April 
1,  1919. 

The  Commission  has  said  to  the  representatives  of  Great  Britain 
that  America  can  not  consider  any  such  claim.  It  has  been  pointed 
out  that  the  United  States  might  make  an  analogous  claim  against 
Great  Britain  for  the  payment  of  her  share  of  the  loss  which  has  been 
sustained  by  our  Government  in  taking  over  the  operation  of  our 
railroads  during  the  war  period.  This  share  might  be  calculated  by 
determining  the  ratio  oi  transportation  for  the  British  to  the  total 
transportation  in  America.  Were  we  to  recognize  the  right  of  Great 
Britain  to  bind  us  by  retroactive  agreements  there  might  be  no  limit 
to  the  liabilities  which  Great  Britain  might  incur  for  our  account 
in  revising  contracts  for  munitions,  supplies,  and  services  and  in 
other  ways.  Likewise  if  the  United  States  should  begin  all  over 
again  to  calculate  the  exact  cost  to  her  of  everything  which  she  has 
procured  from  her  own  nationals  in  behalf  of  Great  Britain  every 
settlement  which  has  been  made  would  have  to  be  revised. 

CONTRACT  CLAIMS  OF  NATIONALS. 

During  the  war  it  became  necessary  for  the  American  Expedition- 
ary Forces  to  enter  into  contracts  for  the  purchase  or  manufacture 
of  war  supplies  with  the  nationals  of  France,  England,  Italy,  Spain, 
Portugal,  and  Switzerland.  A  large  number  of  these  contracts  were 
active  when  the  armistice  was  signed,  and  for  the  most  part  these 
were  promptly  cancelled  in  whole  or  in  part  according  to  the  state 
of  production  and  the  extent  to  which  the  products  would  be  used 
by  the  American  forces.  The  cancellation  of  these  contracts  in 
most  instances  necessarily  involved  losses  to  those  with  whom  they 
had  been  placed;  but,  as  the  resulting  damages  were  unliquidated 
in  their  nature,  there  was  some  doubt  as  to  the  right  of  the  several 
services  of  the  American  Expeditionary  Forces,  or  of  the  War  De- 
partment, to  settle  same.  This  doubt  was  removed  by  Congress 
when  it  passed  the  act  of  March  2,  1919,  conferring  broad  powers 
upon  the  Secretary  of  War,  and  through  him  upon  the  Commission, 
to  make  equitable  adjustment  of  all  such  claims. 

Searching  and  painstaking  investigations  were  made  through  the 
several  services  which  had  negotiated  the  contracts  of  manufacture 
and  purchase  in  the  first  instance,  and  their  reports  were  in  turn 
reviewed  and  frequently  supplemented  by  the  Chief  Finance  Officer, 
who  in  turn  transmitted  the  files  to  this  Commission,  where  they 


UNITED  STATES  LIQUIDATION   COMMISSION.  61 

were  again  subjected  to  a  careful  examination  and  frequently  were 
the  subjects  of  conferences  between  the  claimants,  the  chiefs  of  the 
services  interested,  the  Finance  Officer,  and  members  of  the  Commis- 
sion or  of  the  Commission's  staff.  It  became  necessary  from  time 
to  time  for  the  Commission  to  send  claims  back  for  re-investigation, 
re-study,  and  re-consideration,  and  in  several  cases,  notably  those 
arising  in  Switzerland  and  Spain,  special  representatives  were  sent 
by  the  Commission  to  make  first-hand  investigations  and  reports. 

There  were  in  all  allowed  446  claims  for  cancellation  of  contracts, 
besides  a  number  of  disputed  bills  payment  of  which  the  Commission 
authorized.  Indemnities  have  been  paid  in  the  currencies  of  the 
various  nations  where  the  matters  arose  and  the  rates  of  exchange  have 
varied:  Almost  everywhere  the  rate  has  been  considerably  below  par. 
The  total  amount  claimed,  expressed  in  dollars  at  the  normal  rate  of 
exchange,  was  $17,427,175.41,  while  the  total  payments  made,  expressed 
in  dollars  at  the  normal  rate  of  exchange,  amounted  to  $8,413,984.19. 
There  have  been  53  contract  claims  disallowed  for  various  reasons. 
Their  total  in  dollars  at  the  normal  rate  of  exchange  would  have 
been  $739,894.91.^2 

SETTLEMENTS  WITH  FRANCE. 

FRENCH  ARTILLERY  AND  AMMUNITION  SETTLEMENT. 

During  the  latter  part  of  July,  1918,  Edward  R.  Stettinius, 
then  special  representative  of  the  Secretary  of  War,  began,  in  the 
light  of  the  increased  military  program  of  the  United  States,  to 
negotiate  with  the  French  and  British  Governments  for  increased 
allotments  of  artillery  and  artillery  ammunition.  Numerous  esti- 
mates were  exchanged  between  him  and  the  French  officials,  and 
French  production  was  increased  and  pressed  to  its  fullest  capacity 
in  order  to  meet  America's  needs. 

While  no  formal  contract  was  ever  entered  into  between  the  two 
Governments,  and  w^hile  neither  the  exact  number  of  guns  which 
the  French  could  furnish,  nor  the  exact  number  of  components  for 
them  which  the  United  States  could  supply  was  ever  definitely  agreed 
upon,  there  is  no  doubt  that  the  United  States  relied  upon  the  French 
to  assist  them  substantially  in  their  artillery  program,  and  that  the 
French  enlarged  their  production  with  this  in  view.  A  list  of  the 
materials  and  components  which  America  could  supply  was  drawn 
up,  and  a  list  of  the  guns  which  the  French  could  supply,  expressed 
in  terms  of  numbers  per  month,  was  prepared.  Both  lists  were  cor- 
rected from  time  to  time  and  a  discussion  of  these  figures  continued 
until  the  date  of  the  armistice.    In  the  meantime,  however,  orders 

« See  Appendix  XXV  for  a  chart  showing  the  number  of  claims  settled,  the  total 
amount  claimed  in  all  cases  where  specific  amounts  were  claimed,  the  amount  allowed 
by  the  Commission,  and  the  number  of  claims  disallowed. 


62  UNITED  STATES  LIQUIDATION   COMMISSION. 

were  regularly  given,  and  stocks  delivered  by  Both  parties  in  pur- 
suance of  the  general  understanding.^^ 

It  was  understood  that  the  price  to  be  paid  by  America  should  be 
cost  to  the  French  Government.  As  the  signs  of  an  approaching 
armistice  began  to  be  detected,  efforts  to  conclude  these  arrange- 
ments in  a  formal  contract  w^ere  halted,  but  it  was  always  perfectly 
clear  that  America  was  obligated  to  France  in  regard  to  the  guns 
which  the  French  had  in  process  of  manufacture  for  America. 

Immediately  following  the  armistice,  Mr.  Stettinius  began  negotia- 
tions looking  to  a  fair  and  equitable  settlement  of  these  obligations 
to  the  French,  with  a  view  to  reducing  our  investments  to  a  mini- 
mum, yet  at  the  same  time  getting,  in  the  form  of  completed  artillery 
units,  as  nearly  as  possible  value  received  for  the  money  invested. 
In  the  first  conference  held  with  the  French  authorities  it  developed 
that  France  could  not,  for  economic  and  social  reasons,  suddenl}; 
cease  production,  and  that  they  were  inclined  to  hold  us  responsible 
for  accepting  large  deliveries. 

Mr.  Stettinius  took  the  position,  which  he  steadfastly  and  con- 
sistently maintained,  that  the  United  States  ought  not  to  pay  for  any 
materials  which  had  been  produced  as  a  result  of  continuing  the 
operation  of  French  factories  beyond  the  war  period  in  the  interest 
of  the  social  and  economic  Avelfare  of  France,  and  for  the  benefit  of 
her  people.  The  French  authorities  finally  acquiesced  in  this  posi- 
tion and  in  December,  1918,  Mr.  Stettinius  had  in  conference  with 
M.  Loucheur,  representing  the  French  Government,  agreed  in  prin- 
ciple upon  the  terms  of  a  settlement. 

An  inventory  was  made  of  the  guns  in  process,  with  percentages 
of  completion  on  the  date  of  the  armistice.  These  figures  were  re- 
duced to  terms  of  completed  guns,  and  America  agreed  to  accept  de- 
livery of  and  pay  for  that  many  guns,  orders  for  all  others  being 
cancelled,  without  charge.  The  artillery  ammunition  in  common 
dumps  was  to  be  sorted,  America  taking  all  of  the  American  manu- 
facture, and  France  all  of  French  manufacture.  Contracts  under 
which  the  French  were  to  complete  shells  and  load  them  and  con- 
tracts under  which  America  was  to  furnish  empty  shells  were  to  be 
mutually  cancelled  without  charge. 

It  is  believed  that  the  underlying  principles  of  this  settlement  are 
fair  and  just  to  both  parties.  Certain  it  is  that  America  has  no  cause 
for  complaint.  As  soon  as  the  Commission  was  established  the  terms 
of  this  pending  settlement  were  discussed  at  length  by  the  conmais- 
sioners  with  Mr.  Stettinius  and  measures  were  taken  to  apply  the 

33  See  Appendix  XXVI  for  (1)  a  catalogue  of  artillery  components  to  be  furnished 
by  United  States  to  Prance,  and  (2)  a  catalogue  of  guns  to  be  furnished  by  France  to 
United  States,  as  established  in  the  arrangement  between  Stettinius  and  Mercier  on 
Sept.  19  and  21,  1918.  These  figures  were  never  greatly  changed,  and  they  were  actually 
acted  upon  by  the  iwo  Governments  in  order  to  save  time. 


UNITED  STATES  LIQUIDATION   COMMISSION.  63 

principles  already  tentatively  established  and  to  reduce  the  matter 
to  a  formal  contract,  which,  however,  was  not  finally  executed  until 
August  28,  1919.^* 

The  terms  of  this  contract  may  be  briefly  summarized  as  follows : 

First.  France  delivers  to  the  United  States — 

(a)  944    75-millimeter  gun  materials,  model  1897,  with  limbers. 

(b)  700    155-millimeter  howitzer  materials,  model  1917,  Schnei- 

der design,  with  limbers. 

(c)  198     155-millimeter  G.  P.  F.  materials  with  limbers. 

(d)  Additional  spares  as  specified. 

France  waives  all  claims  for  indemnity  for  the  cancellation  of 
arrangements  for  the  purchase  of  artillery  components  and  ammu- 
nition. 

Second.  In  consideration  of  such  deliveries  the  United  States, 
in  the  general  settlement  with  France,  credits  the  latter  with 
117,501,887.45  francs. 

Under  this  settlement  the  United  States  has  acquired  artillery  units 
of  standard  types  at  cost  without  being  required  to  take  and  pay  for 
any  additional  ammunition,  with  which  we  are  already  abundantly 
supplied,  and  without  the  payment  of  $1  in  the  form  of  cancellation 
indemnities. 

FRENCH  AIRCRAFT  SETTLEMENT. 

When  the  armistice  was  signed,  there  was  being  manufactured  by, 
or  through,  the  French  Government  in  various  factories  in  France, 
for  the  use  of  America,  large  numbers  of  airplanes,  and  large  quan- 
tities of  aeronautical  material  under  a  contract  dated  May  3,  1918, 
and  signed  by  Gen.  Pershing.  By  the  terms  of  this  contract,  written 
orders  were  placed  from  time  to  time  with  the  French  air  ministry, 
which  in  turn  allocated  them  to  particular  French  factories.  The 
price  to  America  was  to  be  the  same  as  that  paid  by  the  French 
Government  for  similar  articles  contracted  for  at  the  same  time  and 
on  similar  terms ;  or,  if  there  were  no  such  contracts,  then  it  was  to 
be  the  same  as  the  price  on  current  contracts  of  the  French  Govern- 
ment for  similar  articles  plus,  in  either  case,  5  per  cent  for  inspec- 
tion, supervision,  and  other  overhead  expenses.  The  contract  would 
haA^e  expired  on  June  30,  1919,  and  it  provided  for  the  delivery  of 
a  certain  number  of  planes  each  month.  It  contained  no  cancella- 
tion clause,  but  the  French  Government  had  a  cancellation  clause  in 
each  of  its  contracts  with  the  manufacturers. 

On  November  11,  1918,  the  American  Air  Service  wrote  to  the 
French  air  ministry  giving  informal  notice  of  cancellation  of  all 
orders   for  aeronautical  materials,  and  negotiations  were   at   once 

3*  See  Appendix  XXVII  for  copy  of  (1)  French  artillery  and  artillery  ammunition 
contract  dated  Aug.  28,  1919,  and  (2)  supplement  to  French  artillery  and  artillery 
ammunition  contract  dated  Nov.  20,  1919. 


64  UNITED  STATES  LIQUIDATION   COMMISSION. 

begun  between  Mr.  Stettinius  and  the  chief  of  the  air  service,  Ameri- 
can Expeditionary  Forces,  representing  America,  and  M.  Tardieu 
and  the  French  air  ministry,  representing  France,  looking  to  an 
equitable  adjustment  of  the  respective  rights  and  liabilities  of  the 
parties  arising  under  this  contract  and  its  cancellation.  Each 
party  instituted  separate  far-reaching  and  intensive  studies  of  the 
conditions  of  manufacture  of  these  materials,  factory  by  factory, 
in  order  to  ascertain  the  actual  loss  to  France  in  cancelling  these 
contracts. 

A  survey  made  by  an  American  Air  Service  committee,  con- 
sisting of  17  officers  and  2  civilians,  was  completed  by  the  latter 
part  of  December,  1918.  This  survey  showed  (1)  the  number  of 
cellules  (airplanes  without  motors)  of  various  types  allocated  to  the 
American  Expeditionary  Forces;  and  (2)  the  number  of  cellules 
actually  in  process  of  construction,  together  with  their  percentage 
of  completion.  With  these  data  in  hand,  the  percentage  of  com- 
pletion of  cellules  under  construction  was  reduced  to  an  equivalent 
of  completed  cellules,  and  their  purchase  price  under  the  contract 
computed.  These  coniputations  were  made  with  a  view  to  proposing 
to  the  French  that  America  might  satisfy  her  obligations  in  respect 
to  this  contract  and  its  cancellation,  by  taking  and  paying  for  com- 
pleted cellules  in  place  of  taking  and  paying  for  a  large  quantity 
of  materials  in  process,  of  which  the  estimated  salvage  value  was 
only  about  5  per  cent  of  the  cost  of  production. 

There  were  wide  discrepancies  between  the  estimates  made  by  the 
American  and  French  services  respectively,  and  it  was  only  after 
long  and  painstaking  conferences  and  diligent  study  that  these  differ- 
ences were  finally  reconciled  and  adjusted.  The  problems  presented 
by  this  settlement  were  among  the  first  taken  up  by  the  Commission 
after  it  reached  Paris.  The  negotiations  and  work  were  carried  on 
under  the  supervision,  and  with  the  approval  of  the  Commission,  by 
Maj.  Gen.  Patrick,  Chief  of  the  American  Air  Service,  and  the  mem- 
bers of  his  staff,  and  an  agreement  with  the  French  was  reached  in 
May,  providing  for  the  following  payments  by  America : 

Francs. 

For  3,568  cellules  in  process 56,295,662 

For  3,979  motors  in  process 64,  563,  788 

For  "cancellation  costs''^ 14,710,537 

For  spare  parts  in  process  '* 19,  962,  553 

For  cancellation  of  spares 8,225,004 

For  miscellaneous  materials  in  process 3,  496, 628 

For  cancellation  of  miscellaneous  materials 413,  589 

167,  667,  761 

^  The   "  cancellation    costs "    were   for    raw    materials,    commitments,    and    labor,    less 

salvage  value,  in  connection  with  articles  ordered  but  not  yet  in  process  of  construction. 

» The  "  spares  "  and  miscellaneous  articles  represented  aviation  accessories  in  process 

of  manufacture.    Pfllrnlfltpd   nn    thp  samp   hnsis  ah  that  nf   f»plliilps   nnd    mnfors. 


UNITED  STATES  LIQUIDATION   COMMISSION.  65 

This  settlement  contemplated  that  aeronautical  material  of  the 
value  of  144,318,631  francs  was  to  be  delivered  to  the  United  States 
and  paid  for  by  it;  while  the  United  States  was  to  paj^  23,349,130 
francs  ''  cancellation  costs."  France  released  the  United  States  from 
any  further  obligations  under  the  contract  of  May  3,  1918,  and  sub- 
sequent orders  placed  pursuant  to  its  terms.  The  underlying  prin- 
ciple of  the  settlement  was  to  find  the  actual  cost  to  France  of  mak- 
ing the  cancellations,  and  then,  instead  of  the  United  States  accept- 
ing salvage  value  only — estimated  at  5  per  cent — on  left-over  mate- 
rials, it  should  as  far  as  possible  take  deliveries  of  these  materials 
in  terms  of  finished  products.  From  what  follows,  it  will  be  seen 
that  the  agreement  concerning  deliveries  under  this  settlement  was 
considerably  modified  in  connection  with  the  settlement  of  our  "  Lib- 
erty motor"  claim. 

LIBERTY  MOTOR  SETTLEMENT. 

About  the  middle  of  May,  the  Commission,  Mr.  Cuthell,  Gen. 
Patrick,  and  members  of  his  staff  presented  to  the  French  air  minis- 
try America's  claim  against  France  growing  out  of  the  production 
of  Liberty  motors  in  the  United  States.  After  several  conferences 
with  the  French  authorities,  it  was  agreed  that  the  same  principles 
which  governed  in  the  settlement  of  the  claim  of  France  against 
America  for  the  cancellation  of  the  aircraft  contract  of  May  3,  1918, 
should  apply  to  the  settlement  of  the  Liberty  motor  claim.  By  this 
method  it  was  established  that  France  owed  the  United  States  the 
sum  of  $21,272,250,  of  which  $19,530,000  represented  the  cost  of 
Liberty  motors  and  spare  parts  which  France  was  entitled  to  receive 
from  America,  and  the  remainder  represented  cancellation  indem- 
nities. 

The  two  settlements  of  large  and  complicated  transactions,  by  the 
application  in  each  case  of  the  same  general  principles,  left  America, 
on  the  one  hand,  obligated  to  deliver  to  France  a  large  number  of 
Liberty  motors,  spare  parts,  and  materials,  much  of  which  was  in  the 
United  States,  and  for  which  France  had  no  particular  use ;  and,  on 
the  other  hand,  left  France  obligated  to  deliver  to  the  United  States 
a  large  number  of  airplanes  and  airplane  materials  which  were  lo- 
cated in  France,  and  for  which  America  had  no  particular  use. 
France  did  want  500  Liberty  motors,  and  America  did  want  a  small 
part  of  the  quantity  due  her  of  airplanes  and  materials.  The  French 
took  delivery  of  the  500  Liberty  motors,  and  America  took  delivery 
of  a  number  of  airplanes  and  spare  parts  of  the  types  which  she 
could  use  to  the  best  advantage,  leaving  with  France  airplanes  and 
spare  parts  which  America  was  entitled  to  receive  of  a  cost  value 
sufficient  to  balance  the  cost  value  of  the  Liberty  motors  which 
183176—20 5 


66  UNITED  STATES  LIQUIDATION  COMMISSION. 

France  was  entitled  to  receiA^e  but  did  not  take  from  America.  At 
this  point,  the  mutual  obligations  to  deliver  were  canceled.^^  In 
this  way  both  parties  were  relieved  from  taking  delivery  of  equip- 
ment and  material  which  they  did  not  need,  and  the  enormous  ex- 
pense of  handling  and  transportation,  both  by  land  and  sea,  was 
saved. 

The  Liberty  motors  and  spare  parts  belonging  to  the  United 
States  in  France  were  used  in  filling  our  obligations  to  make  deliv- 
eries to  England,  in  accordance  with  our  Liberty  motor  settlement 
with  her  f^  and  a  limited  number  of  them  were  sold  to  Poland. 

FKEXCH    TRANSPORTATION    SETTLEMENT. 

When  the  American  Expeditionary  Forces  arrived  in  P'rance  they 
found  that  all  transportation  for  the  French  Arm}^  was  being  for- 
warded on  "  Ordres  de  Transport "  signed  by  French  Army  officers, 
and  that  British  troops  and  materials  were  going  forward  on  like 
orders  signed  by  British  officers.  An  agreement  was  promptly  per- 
fected with  the  French  Government  providing  for  the  transporta- 
tion of  American  personnel  and  supplies  over  French  railroads  under 
the  same  arrangements,  the  orders  being  signed  by  American  offi- 
cers. When  the  Commission  took  up  its  work  it  found  that,  although 
the  matter  had  been  the  subject  of  careful  consideration  and  numer- 
ous conferences,  not  one  cent  had  ever  been  paid  France  or  the  French 
railroads  on  account  or  otherwise,  no  rate  had  ever  been  fixed,  nor 
had  any  formula  or  agreement  been  reached  as  a  basis  for  payment 
by  America  for  the  extensive  services  rendered  her  by  the  railroads 
of  France. 

During  the  war  the  American  Expeditionary  Forces  brought  to 
France  and  put  in  operation  on  the  French  railroads  approximately 
1,100  locomotives  and  17,000  cars.  In  addition  it  established  large 
depots,  regulating  stations,  and  repair  shops,  together  with  about 
300  private  sidings  to  connect  our  installations  with  the  main  lines. 
Our  Army  furnished  to  the  French  railroads  engine  crews,  train 
crews,  repair  shops,  and  personnel,  together  with  all  kinds  of  rail- 
way materials  and  supplies.  All  of  these  services  were  rendered, 
and  all  of  this  equipment  was  furnished,  without  any  particular 
agreement  for  compensation,  although  there  was  always  of  course 
the  general  understanding  on  both  sides  that  everything  was  to  be 
for  "  cost  "  to  the  supplying  nation. 

The  reason  for  the  absence  of  specific  agreements  on  this,  as  on 
several  other  important  matters,  is  to  be  found  in  the  enthusiasm  and 

"*  See  Appendix  XXVIII  for  a  copy  of  the  contract  between  the  United  States,  acting 
through  the  Liquidation  Commission,  and  France,  acting  through  the  Minister  Aero- 
nautique,  dated  Nov.  8,  1919,  with  exhibit  attached. 

^  See  p.  52,  this  report. 


UNITED   STATES   LIQUIDATION    COMMISSION.  67 

energy  with  which  everybody's  attention  during  the  war  was  very 
l^roperly  concentrated  on  the  problem  of  driving  forward  the  mili- 
tary program.  The  accounting  and  final  reckoning  always  received 
secondary  attention.  When  the  Commission  took  up  this  problem, 
in  March,  1919,  it  found  both  the  American  and  French  transporta- 
tion records  extremely  difficult  to  handle  because  so  little  had  been 
done  to  make  cumulative  summaries  from  time  to  time  and  because 
some  of  the  records  were  incomplete.  It  was  only  after  a  series  of 
conferences  participated  in  by  the  commissioners  and  members  of 
their  staff  and  extending  through  many  days  and  weeks,  in  which 
every  avenue  of  information  was  explored  with  painstaking  care  and 
various  facts  and  theories  of  the  case  were  developed,  that  the  Com.' 
mission  was  able  to  formulate  and  propose  a  basis  for  settlement. 

In  1898  the  French  Government  entered  into  an  agreement  called 
the  Traite  Cotelle  with  the  six  principal  railroad  companies  of 
France.  This  covenant  provided  for  the  rates  and  conditions  of 
military  transportation  in  time  of  war  and  it  was  to  continue  in  force 
for  a  period  of  10  years,  subject  to  renewal  at  the  option  of  the 
government.  The  rates  fixed  by  it  were  intended  to  reimburse  the 
railroads  without  profit  for  the  services  to  be  rendered,  and  the 
estimates  upon  which  they  had  been  calculated  were  based  on  the 
low  commercial  rates  existing  in  1898.  The  theory  at  that  time  was 
that  the  impending  war  would  be  of  short  duration  and  that  the  rail- 
roads would  be  able  to  handle  the  large  volume  of  traffic  invalved  in 
mobilization  and  demobilization  of  the  Army  at  very  low  figures. 

This  expectation  was  not  realized.  The  volume  of  traffic  sur- 
passed all  estimates  and  the  cost  of  operation  steadily  advanced.  As 
the  war  went  on  and  the  condition  of  the  French  railroads  became 
worse  and  worse,  the  demand  from  the  railroads  became  very  in- 
sistent that  the  rates  provided  for  in  the  Traite  Cotelle  should  be 
substantially  increased.  It  was  not,  however,  until  the  spring  of 
1919  that  a  new  agreement  was  concluded  between  the  French  Gov- 
ernment and  her  railroads.  The  increases  provided  for  in  this  new 
agreement  are  not  excessive.  In  fact,  some  of  the  experienced  rail- 
road men  connected  with  the  American  Expeditionary  Forces'  trans- 
portation service  with  whom  the  Commission  consulted,  have  advised 
that  justice  to  the  French  railroads  required  still  greater  increases. 

The  charges  for  the  railway  transportation  of  our  troops  and 
supplies  in  France  were,  of  course,  ultimately  due  to  the  individual 
French  railroad  companies,  the  railroads  being  privately  owned. 
But,  when  our  troops  entered  France,  the  French  Government  had 
assured  us  that  we  should  have  the  use  of  all  of  the  transportation 
facilities  in  France  on  the  same  terms  which  their  Government  en- 
joyed and  all  of  our  original  dealings  were  directly  with  that 
government.     Moreover,  the  French  Government  owed  its  railroads 


68  UNITED   STATES   LIQUIDATION    COMMISSION. 

a  much  larger  sum  than  we  owed  them  and  they  were  anxious  that 
we  should  not  make  independent  settlements  with  the  individual 
lines  and  thus  establish  precedents  Avhich  might  embarrass  them  in 
their  own  dealings  with  the  railroad  companies  of  their  country. 
From  America's  viewpoint  it  was  clearly  to  our  advantage  to  deal 
with  the  French  (jovernment  instead  of  directly  with  the  railroads 
inasmuch  as  the  statements  of  account  and  settlements  with  the  6 
trunk  lines  and  79  secondary  lines  would  have  required  a  very  large 
corps  of  accountants  and  an  enormous  overhead  expense,  whereas 
by  dealing  with  the  government  directly  we  were  able  to  make  one 
final  settlement  and  leave  behind  no  claims  to  arise  and  annoy  us 
in  the  future. 

In  discussing  the  settlement,  the  Commission  insisted  upon  a 
fundamental  principle  which  was  finally  accepted  by  the  French 
Government,  viz,  that  America'  would  pay  for  transportation  of  her 
personnel  and  freight  at  the  same  rates  at  which  the  French  Army 
paid,  provided  that  the  rate  fixed  should  not  yield,  out  of  the  share 
coming  from  military  transportation,  a  higher  operating  revenue 
than  the  average  operating  revenue  for  the  three  years  prior  to  1914. 
This  principal  was  an  important  factor  influencing  the  French  Gov- 
ernment and  the  F'rench  railroads  in  their  revision  of  the  Tvaite 
Cotelle.  The  new  military  rates  were  designed  to  wholly  reimburse, 
without  profit,  the  French  railroads  for  the  cost  of  the  services  which 
they  had  performed,  including  in  that  cost  such  share  of  a  fair  rate 
on  invested  capital  as  could  be  justly  assigned  to  the  military  services 
rendered,  but  not  including  enough  to  make  up  the  deficit  which  had 
resulted  from  inadequate  commercial  rates  during  the  war. 

Numerous  troublesome  questions  arose  in  connection  with  the 
application  of  the  general  principle ;  for  example,  the  question  of  the 
rental  rates  to  be  paid  by  French  railways  for  the  larger  and  more 
expensive  American  engines,  the  proper  rentals  for  American  freight 
cars,  which  were  double  the  size  of  the  French  ones,  the  proper  freight 
rate  by  carload  lots  in  the  larger  cars,  etc.  It  was  found  that,  in 
addition  to  the  claims  against  us  for  transportation  of  personnel  and 
freight  over  French  main  line  roads,  there  were  a  large  number  of 
claims  for  transportation  over  79  secondary  lines,  claims  for  main- 
tenance of  about  300  private  sidetracks  and  connections  built  to  reach 
American  installations,  claims  for  switching  and  demurrage,  for 
rental  of  French  locomotives  leased  to  America  for  yard  service,  for 
rental  of  buildings  and  other  facilities,  for  French  employees  en- 
gaged in  private  service  in  American  yards,  for  supplies  including 
coal,  oil,  waste,  heat,  light  and  power,  for  the  upkeep  of  American 
rolling  stock  by  the  French,  for  damage  to  certain  equipment  and 
materials  by  America,  for  construction  expenses  including  a  large 
claim  for  construction  work  on  tJie  secondary  railways  used  for 


UNITED  STATES  LIQUIDATION   COMMISSION.  69 

American  forestry  operations,  and  for  various  other  services  and 
supplies. 

As  a  partial  set-off  to  these  claims  America  had  a  long  list  of  mis- 
cellaneous claims  against  the  French  railroads  and  the  French  Gov- 
ernment. The}^  were  for  rental  of  locomotives  and  cars,  for  services 
of  train  crcAvs,  for  the  repair  of  French  cars  and  locomotives,  for 
coal,  oil,  waste,  and  other  supplies  furnished  to  the  French  railroads 
for  their  engines,  for  loss  and  damji^e,  theft  or  appropriation  of 
American  freight,  for  unloading  and  handling  at  ports  materials  for 
the  French  Government,  for  reconstruction  work  on  French  railways 
in  the  zone  of  the  advance  east  of  Verdun,  for  rent  of  Belgian  loco- 
motives leased  by  America  from  Belgium  and  re-leased  to  French 
railways,  for  erection  by  America  of  locomotives  and  cars  for  French 
railroad  companies  and  for  the  French  Government,  and  for  various 
other  services  and  supplies. 

For  the  purpose  of  handling  this  problem  and  reaching  a  settle- 
ment the  Commission  created  a  special  section  headed  by  Col.  F.  A. 
Delano,  deputy  director  general  of  transportation  of  the  American 
Expeditionary  Forces  and  formerly  president  of  the  Wabash  Rail- 
road and  a  member  of  the  Federal  Reserve  Board.  This  section 
undertook  to  reduce  these  claims  and  counterclaims  to  concrete  form 
and  to  state  an  account  between  the  United  States,  on  the  one  part, 
and  the  French  Government  and  the  French  railroads,  on  the  other 
part.  Finally,  after  several  months'  work  on  the  part  of  Col.  Delano 
and  his  staff,  an  account  was  stated  covering  all  transportation  mat- 
ters arising  between  April  6,  1917,  and  October  1,  1919,  which 
showed : 

Due  by  United  States  to  France:  Francs. 

For  transportation  of  all  freight  and  troops 430,000,000.00 

For  miscellaneous  charges 71, 107,  336.  53 

501, 107,  336.  53 
Due  by  France  to  United  States: 

For  miscellaneous  charges ■ 66,121,946.80 

Net  balance  due  by  United  States  to  France 434,  985,  389.  73 

It  was  with  some  difficulty  that  the  French  Government  was  per- 
suaded that  the  settlement  should  cover  not  only  the  particular  items 
which  had  been  the  subject  of  controversy  but  also  any  and  all 
claims  which  might  be  presented  in  the  future  in  connection  with 
the  American  use  of  French  railroads  during  this  period,  and  that 
it  should  cover  the  use  of  French  railroads  by  naval  forces  and  Army 
auxiliary  services,  such  as  the  Red  Cross,  Young  Men's  Christian 
Association,  Knights  of  Columbus,  Salvation  Army^  and  Jewish 
Welfare  Society.  The  contract  as  eventually  signed  finally  disposed 
of  every  claim  or  demand  of  every  nature  arising  between  the  two 


70  UNITED  STATES  LIQUIDATION   COMMISSION. 

parties  which  was  definitely  connected  with  railroad  transportations, 
including  claims  for  loss  or  damage  to  freight  and  damage  to  railroad 
property.  In  other  words,  the  railroad  transportation  settlement, 
dated  October  1,  1919,^^  is  a  full,  final,  and  complete  settlement  be- 
tween the  United  States  on  the  one  part,  and  the  Republic  of  France 
and  the  French  railroads  on  the  other  part,  for  all  claims  of  any 
nature  arising  in  connection  with  transportation  by  rail  in  France 
prior  to  October  1,  1919,  and  France  agrees  to  indemnify  and  save 
America  harmless  against  any  such  claims  on  the  part  of  French 
railroad  companies. 

The  contract  further  provides  that — > 

On  and  after  October  1,  1919,  and  until  December  31,  1919,  France  will 
furnish  or  cause  the  French  railroads  to  furnish  transportation  over  the 
French  railroads  for  the  personnel,  animals  and  freight  of  said  forces  at  the 
same  rates  at  which,  and  on  the  same  terms  and  conditions  under  which,  the 
said  railroads  shall,  during  the  same  ix^riod,  furnish  transportation  for  tlie 
personnel,  animals  and  freight  of  the  French  Army. 

The  payment  to  France  of  434,985,389.73  francs  settled  all  bills 
for  carrying  and  recarrying  2,000,000  men  over  the  longest  lines  of 
communication  of  any  of  the  armies  operating  in  France,  including 
their  travel  on  leave.  It  settled  the  bills  for  carrying  the  American 
Army  of  Occupation  over  French  railroads  to  and  from  Germany, 
and  it  settled  the  bills  for  transporting  and  handling  over  15,000,000 
tons  of  freight.  This  figure  averages  only  slightly  in  excess  of  200 
francs  for  each  man  to  cover  all  his  travel  by  rail  during  his  entire 
stay  in  France;  while  the  cost  per  ton  per  mile  for  handling  the 
freight  is  only  about  one-half  of  the  corresponding  cost  per  ton  per 
mile  for  the  ocean  transportation  of  the  same  materials. 

FRENCH   PORT   DUES   SETTLEMENT. 

The  port  facilities  of  France  are  built  by  funds  appropriated  from 
the  national  treasury.  The  chambers  of  commerce  of  the  ports,  how- 
ever, assume  responsibility  for  re-paying  the  treasury  its  investments, 
and  for  administering  and  maintaining  the  facilities.  Funds  for  this 
purpose  are  raised  by  means  of  a  charge  on  each  vessel  which  enters, 
known  as  "port  dues"  (Taxes  de  Peage). 

Early  in  the  war,  national  vessels  of  France  and  her  Allies  were 
exempt  from  the  tax,  but  on  November  17,  1917,  the  exemption  was 
cancelled,  and  all  vessels,  French  national  and  allied  national,  as  well 
as  privately  owned  vessels,  were  charged  the  regular  port  dues.  The 
United  States  never  made  any  current  payments  of  these  dues.  Be- 
fore the  Commission  went  to  Europe,  however,  the  question  of  our 
payment  had  been  taken  up  by  the  French  ambassador  at  Washington 

»  See  Appendix  XXIX  for  copy  of  railroad  transportation  contract,  dated  Oct  1,  1919. 
between  France  and  United  States. 


UNITED  STATES  LIQUIDATION   COMMISSION.  71 

who  had  secured  a  general  promise  from  our  Government  that  they 
should  be  paid.  The  American  Expeditionary  Forces  had  tried  to 
arrive  at  a  temporary  settlement,  first  with  each  port,  then  with  the 
French  Government,  but  no  settlement  had  been  reached. 

The  different  chambers  of  commerce  had  been  presenting  claims 
for  port  dues  to  the  American  Expeditionary  Forces  without  any 
uniformity  in  the  basis  of  calculating  rates;  some  were  very  high, 
and  some  were  very  low.  We  had  dealt  with  the  French  Government 
alone,  and  not  with  the  port  authorities,  in  arranging  for  our  entries 
into  French  ports;  so,  when  the  Commission  took  up  the  case,  it 
pressed  the  French  Government  to  make  a  general  settlement  for 
port  dues  and  take  over  the  responsibilities  of  the  United  States  to 
the  separate  chambers  of  commerce.  Several  methods  of  calculating 
a  lump-sum  payment  were  suggested.  The  first  was  to  have  the  total 
expenses  chargeable  to  the  port-dues  fund  calculated  for  each  port 
for  the  period  during  which  the  port  had  been  used  by  American 
vessels,  the  United  States  paying  a  portion  of  that  sum  equal  to  the 
ratio  of  her  shipping  to  all  other  shipping  at  the  port.  This  plan 
was  rejected  by  the  French  authorities. 

The  French  proposed  that  we  pay  commercial  rates,  minus  certain 
exemptions  for  vessels  carrying  military  personnel  and  munitions. 
The  total  charges  calculated  on  this  basis  would  have  been  approxi- 
mately 4,825,000  francs.     This  plan  was  rejected  by  us. 

The  water  level  had  been  raised  at  St.  Nazaire,  practically  for  our 
sole  benefit,  and  at  French  expense.  On  the  other  hand,  we  had  put 
in  docking  facilities  at  numerous  ports  which  had  K^en  used  by  the 
French  and  others  as  well  as  by  our  vessels.  After  a  series  of  nego- 
tiations, the  French  agreed  to  allow  a  reduction  of  50  per  cent  from 
commercial  rates  at  Bordeaux  and  40  per  cent  at  all  other  ports.  The 
fees  were  calculated  on  this  basis,  and  finally  the  French  agreed  to 
accept  a  lump-sum  payment  of  3,000,000  francs  to  cover  dues  for 
the  entries  of  all  vessels  of  the  United  States  or  vessels  serving  the 
United  States  between  April  6,  1917,  and  the  complete  evacuation  of 
France  by  American  forces.  The  contract  was  signed  October  1, 
1919.40 

It  covered  (a)  port  dues  or  tonnage  dues,  which  are  entry  charges 
based  on  tonnage  of  ships,  tonnage  of  cargoes,  and  the  number  of 
passengers  landed;  (h)  the  raising  of  water  level;  and  (e)  dredging 
operations.  There  were  excepted  from  the  terms  of  the  contract 
such  special  charges  as  (a)  pilot's  fees;  (b)  fees  for  the  use  of  cranes, 
hangars,  lighters,  warehouses,  railroad  trackage,  etc.;  (c)  bills  for 
coal,  water,  light,  and  other  supplies;  (d)  repairs;  (e)  trimming 
charges;  and  (/)  port  sanitary  inspection  and  hospital  fees. 

*o  See  Appendix  XXX  for  copy  of  contract  dated  Oct.  1,  1919,  and  evidencing  the 
general  settlement  of  port  dues  with  France. 


72  UNITED  STATES  LIQUIDATION   COMMISSION. 

We  used  15  ports  in  France.  At  the  6  principal  ones,  the  per- 
centage of  our  commerce  to  that  of  the  total  entering  after  April  6, 
1917.  Avas  as  follows:  At  St.  Xazaire,  60  per  cent;  at  Bordeaux,  27 
per  cent ;  at  Nantes,  33  per  cent ;  at  La  Rochelle,  46  per  cent ;  at  Brest, 
53  per  cent;  at  Marseille,  19  per  cent.  No  current  payments  had 
been  made. 

GENERAL  SETTLEMENT  WrPH  THE  FRENCH  GOVERNMENT. 

AVhen  the  Commission  arrived  in  Paris,  it  found  that  the  Ameri- 
can Expeditionary  Forces  were  paying  in  francs  all  bills  rendered 
against  them  by  the  several  departments  of  the  French  Government 
for  supplies,  equipment  and  material  and  for  services,  while  France 
was  settling  like  bills  rendered  bj^  the  American  Expeditionary 
Forces  and  the  War  Department  of  the  United  States  through  credits 
extended  by  the  Treasury  Department  of  the  United  States.  On 
April  15,  1919,  this  practice  was  discontinued  by  direction  of  the 
Commission,  and  an  agreement  was  reached  with  the  French  Gov- 
ernment, in  terms  of  which  invoices  should  be  rendered  by  each 
government  against  the  other  covering  all  bills,  accounts,  claims, 
and  demands  of  every  nature  whatsoever  growing  out  of  or  con- 
nected with  the  war,  and  these  invoices  should  be  checked,  audited, 
corrected,  or  approved,  but  held  in  abeyance  unpaid  until  such  time 
as  a  final  statement  of  account  between  the  two  Governments  could 
be  prepared ;  and  the  obligations  of  one  Government  were  then  to  be 
set  off  against  d^e  obligations  of  the  other. 

It  was  later  agreed  that  this  general  settlement  should  embrace  all 
transactions  arising  between  the  6th  of  April,  1917,  and  the  20th  of 
August,  1919,  between  the  War  Department  of  the  United  States  and 
the  American  Expeditionary  Forces,  on  the  one  part,  and  the  Re- 
public of  France,  on  the  other  part,  and  that  all  bills,  accounts  or 
claims  not  presented  on  or  before  September  6,  1919,  should  be  for- 
ever barred.  Pursuant  to  this  arrangement,  all  possible  pressure 
was  brought  to  bear  by  the  Commission  through  the  several  services 
of  the  Army  and  otherwise  to  have  prepared  and  presented,  before 
September  6,  proper  bills,  accounts  and  invoices  for  all  amounts  due 
from  France  to  us,  and  the  results  were  gratifying. 

Immediately  following  September  6,  a  series  of  conferences  were 
held  between  representatives  of  the  several  services  of  the  Ameri- 
can Army  and  representatives  of  the  corresponding  services  of 
the  French  Army,  which  were  attended  and  directed  by  H.  T. 
Klein  for  the  Commission.  It  was  the  purpose  of  these  conferences 
to  adjust  and  reconcile  all  items  of  the  long  account.  The  differences 
which  could  not  be  adjusted  in  this  way  were  taken  up  by  the  Com- 
mission directly  with  M.  Edouard  Boulanger,  Controleur  de  I'Ad- 


UNITED  STATES  LIQUIDATION   COMMISSION.  73 

ministration  de  I'Armee,  who  was  designated  by  the  French  Govern- 
ment to  act  in  this  capacity.  After  numerous  prolonged  conferences, 
satisfactory  adjustments  were  reached,  an  account  was  stated,  and 
two  contracts  were  drawn,  evidencing  a  final  and  complet^e  settle- 
ment.*^ 

In  the  contract  of  general  settlement,  dated  November  25,  1919, 
evidencing  full,  final,  and  complete  settlement  of  all  accounts,  initi- 
ated, arising,  or  accruing  between  the  6th  day  of  April,  1917,  and 
the  20th  day  of  August,  1919,  in  respect  of  transactions  between  the 
War  Department  of  the  United  States  and  the  American  Expedi- 
tionary Forces  on  the  one  part  and  the  Republic  of  France  on  the 
other  part,  with  four  enumerated  exceptions,  the  releasing  clause 
reads  as  follows : 

The  Republic  of  France  does  hereby  fully,  completely,  and  in  all  things  re- 
lease and  discharge'  the  United  States  of  America,  and  the  United  States  of 
America  does  hereby  fully,  completely,  and  in  all  things  release  and  discharge 
the  Republic  of  France,  in  respect  of  the  transactions  aforesaid,  from  all  bills, 
accounts,  claims,  obligations,  demands,  rights,  causes  of  action,  suits,  and  con- 
troversies, of  every  nature  whatsoever,  which  either  party  now  has  against  the 
other,  or  which  may  hereafter  arise,  whether  by  reason  of  or  in  anywise  inci- 
dent to  or  growing  out  of  the  delivery  or  contract  for  the  delivery  of  materials, 
supplies,  or  equipment,  or  for  services  rendered  or  contracted  to  be  rendered, 
or  for  the  occupation  and  use  of  all  public  properties  of  France  and  all  damages 
thereto  or  otherwise,  initiated,  arising,  or  accruing  during  the  said  war  period 
between  the  said  War  Department  on  the  one  part  and  the  Republic  of  France 
on  the  other  part. 

The  contract  recites  that  the  total  of  all  franc  credits  due  by  each 
party  to  the  other  shows  a  net  balance  in  favor  of  France  of  1,488,- 
619,027.52  francs,  which  America  agrees  to  pay  to  France;  and  the 
total  of  all  dollar  credits  due  by  each  party  to  the  other  shows  a  net 
balance  in  favor  of  America  of  $177,149,866.86,  which  France  agrees 
to  pay  to  America.  The  question  of  the  form  of  payment  and  the  rate 
of  exchange  is  now  being  negotiated  between  the  French  representa- 
tives in  the  United  States,  on  the  one  part,  and  the  representatives  of 
the  United  States  War  and  Treasury  Departments,  on  the  other  part. 

The  contract  further  provides  as  follows : 

Article  II.  Nothing  hereinbefore  contained  shall  be  held  or  construed  to  in 
anywise  annul,  alter,  modify,  or  affect  the  obligations  of  France  held  by  America 

*i  See  Appendix  XXXI  for  (1)  copy  of  the  contract  dated  Nov.  20,  1919,  between 
the  War  Department  of  the  United  States  and  France  evidencing  the  general  settlement 
of  all  mutual  accounts,  claims,  and  demands  arising  in  Europe,  and  (2)  a  copy  of  the 
balance  sheet  used  as  the  basis  of  the  settlement;  and  Appendix  XXXII  for  (1)  the 
contract  of  general  settlement  dated  Nov.  25,  1919,  which  concludes  all  matters  outstand- 
ing between  the  War  Department  of  the  United  States  and  France,  whether  arising  in 
Europe  or  not,  with  the  exception  of  four  matters  specifically  enumerated,  and  (2)  a 
copy  of  the  balance  sheet  used  as  the  basis  of  the  settlement.  The  accountants'  records 
relating  to  the  settlement  are  in  the  files  of  the  Commission. 


74  UNITED   STATES   LIQUIDATION    COMMISSION. 

or  the  obligations  of  either  party  hereto  arising  out  of  the  following  special  con- 
tracts or  agreements,  namely: 

(a)  The  contract  between  America  and  France  dated  August  1,  1919,  where- 
by America  sold  and  France  purchased  certain  properties  therein  referred  to, 
France  agreeing  to  pay  therefor  the  sum  of  four  hundred  million  ($400,000,- 
000)  dollars,  with  interest  thereon,  at  the  time  and  under  the  terms  mentioned 
therein ; 

(&)  The  contract  between  America  and  France  for  the  settlement  of  rail- 
road transportation  and  other  claims,  dated  October  1,  1919,  in  which  America 
agrees  to  pay  France  the  sum  of  four  hundred  and  thirty-four  million  nine  hun- 
dred eighty-five  thousand  three  hundred  eighty-nine  and  TS.IXK)  (frs.  434,- 
985,389.73)  francs; 

(c)  The  contract  between  America  and  France  for  the  settlement  of  all  port 
dues  and  similar  claims,  dated  October  1,  1919,  in  which  America  agrees 
to  pay  France  the  sum  of  three  million  (frs.  3,000,000)  francs; 

(d)  All  contracts,  agreements,  or  arrangements  entered  into  between  America 
and  France  for  or  in  connection  with  sales  made  by  America  to  France  in  the 
United  States  since  November  11,  1918.  • 

Aeticle  III.  This  contract  shall  not  operate  as  a  release  or  modification  of 
or  in  anywise  affect  whatever  claim  France  may  now  have  against  America 
growing  out  of  sfervices  rendered  by  France  to  America  during  the  war  period  in 
connection  with  the  ocean  transportation  of  American  troops. 

The  importance,  from  every  point  of  view,  of  this  comprehensive 
and  far-reaching  settlement  between  the  two  Governments  can  not 
be  too  strongly  emphasized.  Innumerable  disputed  accounts  would 
almost  certainly  have  arisen  during  succeeding  years  and  they  might 
have  become  a  source  of  bitter  controversy. 

Since  the  consummation  of  this  general  settlement  France  has 
presented  certain  claims  aggregating'  more  than  $10,000,000.  These 
were  carefully  considered  by  the  Commission  in  conference  with 
the  French  representatives,  and  the  conclusion  was  reached  by  the 
Commission  that  they  should  be  declined  and  under  no  circumstances 
should  the  general  settlement  he  re-opened.  The  accounts  are  now 
clear  and  the  books  of  both  parties  are  balanced. 

INDEMNIFICATION  OF  AMERICA  BY  FRANCE  AGAINST  ALL  CLAIMS  OF 
NATIONALS  FOR  TORTS,  WORKMEN'S  COMPENSATION,  RENTS,  REQUISI- 
TIONS, AND  DAMAGES. 

The  general  settlement  made  with  France  aflFords  America  no  pro- 
tection against  tort  claims  of  French  nationals,  claims  of  nationals 
based  on  the  workmen's  compensation  act,  or  claims  of  nationals  for 
rents,  requisitions,  or  other  damages.  These  claims  were  handled 
in  France  by  the 'Renting,  Requisition,  and  Claims  Service  of.  the 
American  Expeditionary  Forces. 

AVhen  the  Commission  took  up  its  w^ork  it  found  that  the  Renting, 
Requisition,  and  Claims  Service  had  an  admirable  organization, 
functioning  under  the  direction  of  Col.  Blanton  Winship,  the  staff  of 


UNITED   STATES   LIQUIDATION    COMMISSION.  75 

officers  being  composed  largel}^  of  men  drawn  from  such  civilian 
;;!irsuits  as  law,  architecture,  and  engineering.  The  Commission 
deemed  it  the  part  of  wisdom  not  to  interfere  unduly  with  this 
work,  which  was  being  well  done;  but  in  a  general  way,  through 
Col.  Winship  and  the  members  of  his  staff,  to  keep  in  touch  with 
the  Avork,  and,  by  means  of  informal  conferences,  to  define  the  general 
policies  to  be  carried  into  effect. 

This  service  had  been  organized  in  the  spring  of  1918,  pursuant 
to  the  act  of  Congress  of  April  18,  1918,  which  conferred  upon  the 
War  Department  of  the  United  States  the  right  to  pay  indemnities 
for  damages  caused  by  the  American  forces  in  Europe  to  persons 
and  property  of  friendly  nationals,  providing  such  claims  "should 
be  payable  according  to  the  law  or  practice  governing  the  military 
forces  of  the  country  in  which  they  occur." 

The  activities  of  this  service  embraced  the  work  of  (1)  billeting 
troops  and  settling  claims  for  damages  to  billets  {degats)  ;  (2)  rent- 
ing lands  and  buildings,  and  paying  the  rentals;  (3)  requisitioning 
real  and  personal  property;  (4)  examining  and  settling  all  claims  for 
personal  injuries  and  damages  to  property;  (5)  handling  admiralty 
claims  arising  in  European  waters;  and  (6)  to  a  limited  extent, 
under  the  direction  of  the  Commission,  investigating  and  adjust- 
ing claims  for  personal  injuries  or  loss  of  life,  under  the  French 
workmen's  compensation  act,  of  the  laborers  employed  by  the  mili- 
tary forces  of  the  United  States. 

This  service  paid  out  50,108,091  francs  for  billeting  American 
troops  in  France,  and  the  accounts  show  8  centimes  (or,  at  the  rate 
of  10  francs  to  the  dollar,  less  than  1  cent)  per  day  per  man  as  the 
average  cost  of  billeting  our  troops.  This  European  method  of 
quartering  of  troops  is  much  cheaper  than  tenting  the  men.  Under 
the  Act  of  April  18,  1918,  the  service  has  investigated  and  settled 
38,299  claims,  in  which  the  total  amount  claimed  was  approximately 
15,000,000  francs,  paying  in  complete  settlement  a  total  of  8,337,- 
719.07  francs.  It  has  investigated  and  declined  13,446  claims  under 
this  same  act,  where  the  amount  claimed  exceeded  in  all  10,000,000 
francs.  In  the  case  of  552  of  the  claims  w^hich  were  disallowed,  a 
liability  was  admitted  by  the  service,  but  the  claimant  refused  to 
accept  the  amount  offered  in  settlement.  This  service  has  paid,  for 
the  use  and  occupation  of  real  estate,  38,421,780  francs,  and  for 
damage  to  real  estate,  9,623,309  francs. 

The  work  of  the  service  was  carried  on  in  72  Departments  of 
France,  in  England,  and  other  places  where  the  American  Army 
operated.  The  number  of  its  personnel  has  changed  considerably 
from  time  to  time,  being  highest  in  June,  1919,  when  the  staff  con- 
sisted of  663  officers,  37  field  clerks,  and  1,065  enlisted  men,  organ- 
ized into  52  companies. 


76  UNITED  STATES  LIQUIDATION   COMMISSION. 

The  work  has  been  well  done,  and  while  the  total  amount  paid  has 
been  large,  no  individual  case  was  settled  without  the  careful  investi- 
gation of  a  competent  officer.  The  total  overhead  expense  of  main- 
taining the  service  was  estimated  at  $3,000  a  day  on  September  1, 
1919,  and  at  25.000  francs  per  day  on  December  1.  1919. 

While  the  Renting,  Requisition,  and  Claims  Service  made  a  deter- 
mined drive  to  dispose  finally  of  all  claims  within  its  jurisdiction  by 
the  time  the  other  matters  in  France  should  be  liquidated,  it  was 
found  that  ncAv  claims  were  being  constantly  presented,  and  claims 
which  had  been  declined  because  of  excessive  demands,  or  otherwise, 
were  being  re-opened.  The  service  had,  on  December  1,  1919,  claims 
against  the  American  Expeditionary  Forces  for  rentals  where  the 
rate  was  fixed,  amounting  to  more  than  1,500,000  francs,  and  claims 
for  damages  to  leased  propert}'  estimated  at  4.000.000  francs.  It 
had  on  file  unsettled  claims  for  use  of  and  damage  to  requisitioned 
property  estimated  at  1,500,000  francs.  There  were  a  few  unpaid 
billeting  claims  and  claims  under  the  workmen's  compensation  act 
for  over  500,000  francs.  Many  of  the  matters  which  had  not  yet 
been  concluded  at  this  time  were  those  involving  peculiarly  difficult 
or  delicate  problems  where  the  parties  had  been  unable  to  reach  an 
amicable  and  satisfactory  adjustment. 

In  order  to  avoid  the  necessity  of  maintaining  the  Renting,  Re- 
quisition, and  Claims  organization  in  France  for  an  indefinite  period 
to  investigate  and  adjust  pending  claims,  as  well  as  dormant  ones 
which  were  constantly  being  presented,  the  Commission  co-operating 
with  the  commanding  general  of  the  American  Expeditionary  Forces, 
began  negotiations  with  the  French  Government  as  early  as  August, 
1919,  with  a  view  to  inducing  it  to  step  into  America's  shoes  and 
take  over  these  investigations  and  settlements.  It  was  urged  tliat, 
since  the  French  Government  already  had  an  organization  which 
was  engaged  throughout  France  in  handling  claims  of  this  character 
and  would  continue  in  that  work,  there  would  be  a  very  small  addi- 
tional overhead  expense  connected  with  their  taking  up  chiims  in 
behalf  of  America.  It  was  made  clear  that  it  was  not  our  purpose 
merely  to  save  money  by  foisting  upon  France  an  expense  whicli 
should  be  borne  by  America ;  but  that,  because  America  would  be 
eliminating  a  large  overhead  expense,  she  could  afford  to  make  to 
France  a  full  and  even  liberal  payment  in  order  to  induce  France 
to  undertake  this  work. 

After  careful  study  of  the  problem  and  numerous  conferences  by 
authorized  representatives  of  the  French  Government  appointed  for 
that  purpose,  on  the  one  hand,  and  by  the  Commission,  the  command- 
ing general,  American  Expeditionary  Forces,  and  the  Director  of 
the  Renting,  Requisition,  and  Claims  Service,  on  the  other  hand,  an 
agreement  was  reached  on  December  1,  1919,  under  the  terms  of 


UNITED   STATES   LIQUIDATION^   COMMISSIONS.  77 

which  the  French  took  over  all  obli^rations  which  our  Rentino:,  Re- 
quisition, and  Claims  Service  had  outstanding  on  that  date.*^ 
The  contract  provides,  among  other  things : 

France  hereby  substitutes  itself  for  America  in  reference  to  and  guarantees 
the  latter  against  all  claims,  demands,  obligations,  rights,  actions,  suits,  and 
controversies  of  every  nature  arising  in  France  during  the  said  war  period 
which  any  inhal)itant  or  any  person  subject  to  the  sovereignty  of  France  or 
any  organization,  association,  or  corporation,  commune,  or  department  of 
France  may  now  have  or  which  may  hereafter  accrue  for  damage  to,  use,  or 
loss  of  property,  or  injury  to  or  death  of  persons,  caused  by  or  resulting  from 
acts  or  omissions  of  members  of  the  American  military  forces  or  any  one  con- 
nected therewith  (not  including  menrbers  of  the  American  welfare  organiza- 
tions) during  the  said  war  period — that  is,  between  the  6th  day  of  April,  1917, 
and  the  31st  day  of  December,  1919. 

America  in  turn  agrees  to  pay  France — 

in  cash  the  sum  of  twelve  million  ( 12.0()(),(K)0 )  francs  (hereinafter  designated 
"minimum  payment  ").  If  upon  the  31st  day  of  December,  1923,  the  aggregate 
of  all  payments  made  by  France  to  claimants  on  account  of  the  claims  assumed 
by  it  exceed  such  minimum  payment,  then  in  such  event  America  agrees  on 
demand  to  then  jiay  to  France  such  excess :  Provided,  hoicever,  That  such 
additional  payment  by  America  shall  in  no  event  exceed  the  sum  of  six  million 
(0.000,000)   francs. 

It  will  be  noted  that  the  amount  paid  by  France  to  clainia7its 
only  is  taken  into  account  and  no  allowance  is  made  for  overhead  and 
administrative  expenses. 

Attention  is  called  here  to  the  status  in  France  of  claims  arising 
out  of  "  acts  of  war"  (faits  de  guerre).  Neither  the  Renting,  Requi- 
sition, and  Claims  Service  nor  the  Commission  has  ever  expressed 
any  intention  of  honoring  such  claims,  nor  has  France  or  her  na- 
tionals ever  pressed  any  claim  against  America  for  damages  arising 
in  this  way.  But  it  is  worthy  of  note  that  France,  by  an  act  of  April 
IT,  1919,  has  provided  for  payments  to  her  own  nationals  for  damages 
resulting  from  faits  de  guerre.  This  was  done  for  the  purpose  of 
equalizing  the  burdens  of  the  war's  destruction  in  favor  of  the  in- 
habitants of  the  devastated  regions  and  is  an  act  of  grace  on  the 
part  of  the  French  Government.  The  first  article  of  the  act  reads, 
•'  The  Republic  proclaims  the  equality  and  the  solidarity  of  all 
French  citizens  with  respect  to  the  charges  of  Avar."  It  is  also  worthy 
of  note  that  the  act  of  Congress  of  April  18,  1918,  under  which  the 
Renting,  Requisition,  and  Claims  Service  has  been  settling  tort  and 
similar  claims  provides  that  "  claims  under  this  statute  shall  not  be 
approved  unless  they  would  be  payable  according  to  the  law  or  prac- 
tice governing  the   military  forces  of  the  country  in  which  they 


« See  Appendix  XXXIII  for  copy  of  the  contract  between  the  United  States  and 
France,  evidencing  the  assumption  by  France  of  all  claims  of  French  nationals  against 
America  for  torts,  employer's  liability,  rents,  and  requisitions. 


78  UNITED   STATES   LIQUIDATION    COMMISSION. 

Attention  is  also  invited  to  the  fact  that  the  treaty  of  peace  be- 
tween the  Allied  and  Associated  I^owers,  on  the  one  part,  and  (xer- 
man}^,  on  the  other  part,  signed  at  Versailles,  June  28,  1919.  reads  in 
part  (art.  232)  as  follo^Ys: 

The  Allied  and  Associated  Goveniinems  ieco;iiiize  tliat  tlie  resonrces  of  Ger- 
many are  not  adequate,  after  talvinjr  into  account  pernisment  diminutions  of 
sucli  resources  whieli  will  result  from  othej-  provisions  of  the  present  treaty, 
to  make  complete  restoration  for  all  such  losses  and  damajres. 

Part  VIII,  Annex  I,  paragraph  9,  of  the  treaty  provides  in  sub- 
stance that  Germany  shall  assume  liability  for  damage  in  respect  of 
all  property  wherever  situated  belonging  to  an}^  of  the  Allied  or 
Associated  States  or  their  nationals,  which  has  been  carried  off, 
seized,  injured,  or  destroyed  hy  the  acts  of  Germany  or  her  allies  on 
land,  on  sea,  or  from  the  air. 

Much  of  the  destruction  in  the  devastated  regions  of  northern 
France  is,  of  course,  due  to  acts  of  war  on  the  part  of  the  armies  of 
France  and  her  allies,  as  well  as  to  acts  on  the  pai-t  of  the  armies 
of  Germany  and  her  allies.  As  above  noted,  France  has,  by  the  act  of 
April  17,  1919,  assumed,  as  between  it  and  its  nationals,  the  burden  of 
making  reparation  because  of  such  destruction  without  respect  to  the 
army  responsible  for  it. 

It  is  conceivable  that  at  some  future  time  a  French  administration 
may  feel  justified  in  calling  upon  America  for  contribution  in  dis- 
charging so  much  of  this  burden  as  may  not  be  covered  by  German 
reparation  payments,  in  the  ratio  which  the  destruction  wrought  by 
the  American  Army  bears  to  the  whole  destruction.  Attention  is 
invited  to  the  fact  that  the  releasing  clause  of  the  contract  of  De- 
cember  1,  1919,  is  clearly  broad  enough  to  estop  France  from  ever 
presenting  and  pressing  such  a  claim. 

SUMMARY. 

1.  The  total  sales  of  the  War  Department  property  in  Europe 
made  by  this  Commission  aggregate  $822,923,225.82.  Of  this, 
$400,000,000  is  evidenced  by  French  interest -bearing  bonds  now  on 
deposit  with  the  United  States  Treasurer,  representing  the  considera- 
tion for  the  bulk  sale  in  accordance  with  the  contract  of  August  1, 
1919,  under  which  all  of  the  United  States  War  Department  prop- 
erty in  France  then  remaining  unsold  was  disposed  of. 

2.  The  settlement  with  France  by  which  America's  claims  against 
French  railroads  were  set  off  against  all  transportation  claims  of 
every  nature  of  France  and  French  railroads  against  America  left 
a  net  balance  due  France  by  America  of  434,985,389.73  francs. 

3.  All  claims  of  France  and  her  several  chambers  of  commerce 
for  work  done  at  ports  for  our  benefit  and  for  port  dues  were  as- 
sumed by  France,  on  America's  agreeing  to  pay  3,000,000  francs. 


UNITED  STATES  LIQUIDATION   COMMISSION.  79 

4.  All  claims  of  any  person,  organization,  association,  corporation, 
commune,  or  department  of  France  against  America  for  damage  to, 
use,  or  loss  of  property  or  injury  to  or  death  of  persons  have  been 
assumed  by  France,  upon  the  agreement  by  America  to  pay  France 
the  sum  of  12,000,000  francs. 

5.  The  general  settlement  with  France  of  November  25,  1919, 
finally  and  for  all  time  settled  all  claims  and  controversies  not  above 
or  therein  enumerated  between  France  and  the  War  Department  of 
the  United  States,  France  by  the  terms  of  said  contract  acknowledg- 
ing an  indebtedness  to  America  (in  addition  to  the  $400,000,000, 
above  mentioned)  of  $177,149,866.86,  and  America  acknowledging  an 
indebtedness  to  France  of  1,488,619,027.52  francs  in  addition  to  the 
items  mentioned  in  the  foregoing  paragraphs,  numbered  2,  3,  and  4. 

By  reason  of  these  several  transactions,  America  has  avoided  in- 
curring the  enormous  overhead  expense  incident  to  maintaining  large 
organizations  in  France  for  an  indefinite  period,  and  has  been  en- 
abled speedily  to  withdraw  from  France  all  of  the  representatives  of 
the  War  Department  and  of  the  Army,  leaving  behind  a  clear  record 
and  carrying  with  her  the  confidence  and  good  will  of  France  and 
of  her  people. 

BELGIAN  SETTLEMENT. 

Copy  of  the  general  settlement  agreement  entered  into  with  Bel- 
gium on  November  7, 1919,  will  be  found  in  Appendix  XV;  reference 
to  this  settlement  will  be  found  on  page  33  of  this  report. 

ITALIAN  SETTLEMENT. 

On  August  13,  1919,  John  H.  Bay,  representing  Chester  W. 
Cuthell,  as  special  representative  of  the  Secretary  of  War,  entered 
into  an  agreement  with  Federico  Brofferio,  representative  of  the 
inter-ministerial  committee  of  the  Italian  Government  for  the  read- 
justment of  the  industries  of  war,  wherein  Italy  agreed  to  pay  to 
America  the  sum  of  $5,200,000,  for  picric  acid  (not  delivered), 
spruce,  fir,  and  nitrocellulose  powder,  and  America  waived  claims  for 
trinitrotoluol  and  cotton  linters.*^ 

In  December,  1919,  Harry  T.  Klein  (formerly  lieutenant  colonel, 
judge  advocate)  was  sent  to  Italy  as  the  Commission's  repre- 
sentative to  negotiate  a  general  settlement  of  all  accounts  and  claims 
with  Italy  arising  in  Europe.  Gen.  Albricci,  the  minister  of  war, 
appointed  Maj .  Gen.  Angelo  Modena  as  the  Italian  representative  to 
consummate  this  general  settlement.  After  repeated  conferences  be- 
tween the  Commission's  representative  and  Gen.  Modena  and  the 

*3  See  Appendix  XXXIV  for  copy  of  contract  dated  Aug.  13,  1919,  between  Italy  and 
the  United  States  War  Department. 


80  UNITED   STATES   LIQUIDATION    COMMISSION. 

representatives  of  the  Italian  treasury  department,  aviation  corps, 
minister  of  transportation,  and  the  ordnance  department,  an  agree- 
ment was  finally  reached  in  February,  1920,  that  the  net  balance  due 
and  unpaid  in  favor  of  Italy,  amounted  to  the  sum  of  29,106,546.75 
lire.  Copies  of  the  proposed  contract  were  furnished  by  Gen. 
Modena  to  the  ministers  interested,  and  Gen.  Modena  executed  this 
contract  on  February  18,  1920,  under  authority  conferred  upon  him 
at  a  meeting  of  the  council  of  ministers.** 

This  contract  contains  not  only  a  complete  release  of  all  claims  of 
the  Italian  Government  against  the  United  States  War  Depart- 
ment, arising  in  France,  Italy,  and  regions  adjoining  Italy,  between 
April  6,  1917,  and  December  31,  1919,  but  is  also  a  complete  settle- 
ment and  release  of  the  claims  of  all  Italian  nationals  for  injury  to 
l^ersons  or  damage  to  property  caused  by  the  acts  of  the  military 
forces  of  America,  between  the  dates  mentioned  and  occurring  any- 
where in  France,  Italy,  and  regions  adjoining  Italy. 

The  larger  part  of  the  net  balance  due  Italy  was  composed  of  the 
aviation  account,  which  consisted  of  items  for  aviation  material  fur- 
nished by  Italy  and  services  rendered  in  the  training  of  American 
aviators.  This  account  was  carefully  investigated  by  a  board  of 
aviation  officers  and  recommended  by  them  and  by  Gen.  Patrick, 
in  charge  of  aviation  in  France. 

Another  large  item  of  the  account  as  finally  allowed  was  for 
ordnance  material  aggregating  approximately  6,000,000  lire.  Four 
requisitions  had  been  placed  with  Italy  for  ordnance  material, 
artillery  ammunition,  etc.,  Austrian  and  Italian,  to  be  sent  to  the 
United  States  for  experimental  purposes.  After  this  material  was 
concentrated  by  Italy  for  delivery,  the  prices  quoted  were  found  to 
be  unusually  high  and  attempts  were  made  by  our  ordnance  de- 
partment, through  military  channels,  to  secure  a  reduction  in  prices 
or  a  cancellation  of  the  requisitions  in  question,  without  success.  The 
Commission's  representative,  after  several  conferences  with  Gen. 
Modena  and  Gen.  Cortesa,  chief  of  the  Italian  ordnance  department, 
succeeded  in  securing  a  cancellation  of  two  of  these  ordnance  requi- 
sitions without  payment  of  any  indemnity,  and  secured  a  reduction 
of  60  per  cent  on  Austrian  material  actually  delivered  and  20  per 
cent  on  Italian  material  actually  delivered  under  the  two  remaining 
requisitions;  resulting  in  a  saving  of  approximately  6,000,000  lire 
to  the  United  States  on  the  price  of  the  material  accepted,  at  the 
then  existing  rate  of  exchange.  No  indemnity  whatever  was  paid 
for  material  not  accepted. 

Another  large  item  of  the  account  was  for  subsistence  stores  and 
material  furnished  the  American  troops  by  Italy,  which  under  an 

**  See  Appendix  XXXV  for  copy  of  contract  of  general  settlement  dated  Feb.  18, 
1920,  between  the  United  States  War  Department  and  the  Kingdom  of  Italy. 


UNITED  STATES  LIQUIDATION   COMMISSION.  81 

aofreement  of  the  chief  of  the  American  Military  Mission  in  Italy 
made  in  1918,  were  to  be  returned  in  kind.  Italy  had  repeatedly  re- 
fused to  accept  a  cash  settlement  of  this  account.  However,  after 
several  consultations  with  Gen.  Modena  and  his  advisers,  he  finally 
agreed  to  accept  a  cash  settlement  of  this  subsistence  account  on  sub- 
stantially the  price  basis  of  what  it  would  cost  the  United  States 
to  lay  these  articles  down  in  Italy.  This  account  approximated 
5,000,000  lire. 

The  balance  of  the  Italian  account  consisted  of  items  for  miscel- 
laneous material  supplied  to  our  troops,  railroad  transportation  for 
troops,  and  supplies,  and  the  sum  paid  Italy  for  indemnifying 
America  against  the  claims  of  Italian  nationals.  There  were  a  small 
number  of  R.  R.  &  C.  claims  remaining  undisposed  of,  and  a  number 
of  cases  which  we  were  unable  to  settle  directly  with  the  claimants  on 
account  of  disagreement  as  to  liability  or  the  amount  which  should 
be  paid.  Italy  assumed  all  these  outstanding  claims  for  180,000  lire 
(less  than  $15,000,  at  current  rate  of  exchange  when  the  contract  was 
signed),  which  is  regarded  as  an  extremely  satisfactory  settlement 
in  the  interest  of  the  United  States  War  Department. 

The  American  claims  against  Italy,  amounting  to  4,669,974.71  lire, 
were  allowed  in  their  entirety  by  Italy. 

The  only  Italian  item  arising  in  Europe  left  unsettled  by  this  con- 
tract is  the  American  claim  against  Italy  for  copper  ingots,  shipped 
to  Italy  for  the  electrification  of  the  Modane  Railroad,  amounting 
approximately  to  $207,975.  This  claim  was  held  in  abeyance  pending 
a  decision  of  the  Inter-allied  Reparations  Commission,  to  whom  it 
was  referred  on  the  suggestion  of  Gen.  Bliss  for  decision,  on  the 
question  of  the  distribution  of  the  expenses  for  such  electrification 
and  w^hat  countries  should  pay  for  such  improvement. 

LUXEMBOURG  CLAIMS. 

Incidental  to  the  advance  and  withdrawal  of  our  Army  of  Occu- 
pation, a  large  number  of  claims  arose  in  the  Grand  Duchy  of  Lux- 
embourg. Many  of  these  were  presented  by  nationals  and  were  dis- 
posed of  by  the  Renting,  Requisition,  and  Claims  Service.  Others, 
presented  by  the  Luxembourg  government,  cover  the  use,  occupation, 
and  damage  to  buildings,  highways,  and  other  public  property. 
The  railroads  of  Luxembourg  presented  claims  covering  services  ren- 
dered in  the  transportation  of  our  troops.  All  of  these  claims  (not 
disposed  of  by  the  Renting,  Requisition,  and  Claims  Service)  aggre- 
gate approximately  3,000,000  francs. 

Certain  German  war  material  taken  by  our  Army  of  Occupation 
in  Luxembourg,  in  the  course  of  its  advance,  has  already  been  dis- 
183176—20 6 


82  UNITED  STATES  LIQUIDATION   COMMISSION. 

posed  of.  This  Commission  has  asserted,  in  behalf  of  the  United 
States,  ownership  of  German-built  railroad  tracks  located  in  Luxem- 
bourg and  reduced  to  possession  by  our  Army  of  Occupation  in  the 
course  of  its  advance.  This  Commission  has  proposed  to  the  Luxem- 
bourg authorities  that  the  United  States  will  sell  and  deliver  to  it 
all  of  its  interest  in  these  railroad  tracks,  in  full  satisfaction  of  all 
claims  which  the  Grand  Duchy  of  Luxembourg  may  have  against 
the  United  States,  of  every  nature  whatsoever,  and  the  undertaking 
on  the  part  of  the  Grand  Duchy  to  indemnify  and  save  harmless  the 
United  States  against  all  claims  ^^hich  the  railroads  and  nationals  of 
Luxembourg  may  have  against  the  United  States.  It  is  believed 
that  the  settlement  will  be  reached  on  the  basis  proposed.  . 

CONCLUSION. 

Some  conception  ®f  the  Commission's  task  can  be  formed  from  (a) 
the  statement  of  amounts  involved  in  the  settlements  negotiated  and 
actually  consummated  by  and  under  the  direction  of  the  Commission 
of  mutual  accounts  and  claims  between  the  United  States  War  De- 
partment, on  the  one  part,  and  the  Allied  Governments  and  their 
nationals,  on  the  other  part  (which  settlements  were,  where  possible, 
consummated  through  set-offs  without  cash  payments),  and  (?>)  the 
amount  of  sales  of  property  made  by  the  Commission,  as  follows : 

Amounts  involved  in  settlements :  *° 

Settlements  with  France  $748,392,004.82 

Settlements  with  Great  Britain 112,  996,  912. 16 

Settlements  with  Belgium 2,  279,  827. 12 

Settlements  with  Italy 12,  620, 173.  75 

Settlements    with    individuals,     associations, 

and  others 17,427,175.41 

Total  amount  involved  in  settlements  __    893,  716,  093.  26 
Amounts  of  sales :  " 

Bulk  sale  to  France $400,000,000.00 

Other  sales,  stated  in  dollars 377, 905, 193.  23 

Other  sales,  stated  in  francs  and  converted  __      45,  018, 032.  59 

Total  amount  of  all  sales 822,923,225.82 

The  Commission  was  created  February  11,  1919.  The  two  remain- 
ing commissioners  are  tendering  their  resignations  on  this  the  31st 
day  of  May,  1920.     The  total  expenses  incurred  and  disbursements 

«  These  figures  are  approximate  but  are  understated,  inasmuch  as  many  claims  with- 
drawn, reduced,  or  disallowed  are  not  included. 

*«  All  conversions  into  dollars,  for  the  purpose  of  this  statement,  have  been  made  at 
the  normal  rate  of  exchange. 


UNITED  STATES  LIQUIDATION   COMMISSION.  83 

made  by  the  Commission  aggregate  $222,883.17.*'  These  expendi- 
tures are  a  trifle  less  than  thirteen  one-hundred-thousandths 
(0.00013)  of  the  amounts  involved  in  settlements  made  and  sales 
negotiated  by  the  Commission. 

Respectfully  submitted, 

Edwin  B.  Parker, 
Chairman,  United  States  Liquidation  Oom/mission — 

War  Department. 
Washington,  D.  C,  May  31,  1920. 

*'  See  Appendix  XXXVI  for  statement  of  expenses  and  disbursements  of  the  United 
States  Liquidation  Commission — War  Department  from  date  of  organization,  February 
11,  1919,  to  May  31,  1920,  inclusive. 


APPENDIX 

TO  THE 

REPORT  OF  THE  UNITED  STATES 
LIQUIDATION  COMMISSION 

WAR  DEPARTMENT 


EDWIN  B.  PARKER.  Chairman 


85 


CONTENTS. 


Page. 

I.    Acts  of  Congress  approved  May  10,  1918,  and  July  9,  1918 89 

II.  Section  3  of  Act  of  Congress  approved  March  2,  1919 90 

III.  General  Orders,  No.  24,  War  Departm-ent,  February  11,  1919___  90 

IV.  General  Orders,  No.  40,  War  Department,  March  19,  1919 92 

V.  General  Orders.  No.  18,  headquarters  S.  O.  S.,  A.  E.  F.,  April 

1,  1919 93 

VI.  The  categories . :l 95 

VII.  Categorical  summary  of  inventories  of  American  Expeditionary 

Forces'    property 100 

VIII.    Categorical  recapitulation  of  American  Expeditionary  Forces' 

property  in  France 101 

IX.  Form  of  receipt  given  by  French 103 

X.  Bulk  sale  contract  to  France,  August  1,  1919 103 

XI.  Letter  from  Mr.  Hoover  to  Judge  Parker 111 

XII.  Liberated  nations  and  their  commercial  organizations 113 

XIII.  Sales  of  animals  in  American  Expeditionary  Forces 113 

XIV.  Sales  Charts  I,  II,  and  III 114 

XV.  Contract  with  Kingdom  of  Belgium' 118 

XVI.   Sale  of  motor  stocks  in  Germany 122 

XVII.   Installations  in  England 130 

XVIII.   British  artillery  settlement 131 

XIX.  Australian  wool  settlement 136 

XX.  Chateauroux  tank  plant  settlement,  August  8,  1919 136 

XXI.  Final    contract    of    settlement    of    Chateauroux    tank    project, 

October  4,  1919 138 

XXII.  Extrfict  from  Cuthell-Inverforth  agreement  of  May  10,  1919,  in 

re  Liberty  motors 142 

XXIII.  Settlement  of  British  interest  claim 143 

XXIV.  Liquidation  of  nitrate  pool 145 

XXV'.  Disposition  of  private  claims 15U 

XXVI.    Disposition    of    French-American    artillery    under    Stettinius- 

Loucheur  arrangement  150 

XXVII.   French  artillery  and  ammunition  agreement,  August  28,  1919--  151 

XXVIII.  French  air-service  settlement,  November  8,  1919 156 

XXIX.   French  railroad  transportation  settlement,  October  1,  1919 15') 

XXX.   Port  dues  settlem-ent  with  France,  October  1,  1919 16^ 

XXXI.   Settlement  with  France  of  European  accounts,  November  20, 

1919 165 

XXXII.   General  settlement  with  France,  November  25,  1919 172 

XXXIII.  Renting,  Requisition,  and  Claims  settlement  with  France,  De- 

cember 1,  1919 179 

XXXIV.  Cuthell-Brofferio  agreement  with  Italy,  August  13,  1919 182 

XXXV.  General  settlement  with  Italy.  February  18,  1920 185 

XXXVI.   Statement  of  expenditures , 191 

87 


APPENDIXES. 


APPENDIX  I. 

Act  of  Congke8>s,  Appuoved  May  10,  1918. 

An  act  authorizing  the  President  during  the  existing  emergency  to  sell  supplies,  materials, 
equipment,  or  other  property,  heretofore  or  hereafter  purchased,  acquired,  or  manufac- 
tured by  the  United  States,  in  connection  with,  or  incidental  to,  the  prosecution  of 
the  war. 

Be  it  enacted  hy  the  Senate  and  House  of  Representatives  of  the  United  States 
of  America  in  Congress  assembled,  ,That  during  the  existing  emergency  the 
President  be,  and  he  hereby  is,  authorized,  in  his  discretion,  and  upon  such 
terms  as  he  shall  deem  expedient,  through  the  head  of  any  executive  depart- 
ment, to  sell  any  supplies,  materials,  equipment,  or  other  property  heretofore 
or  hereafter  purchased,  acquired,  or  manufactured  by  the  United  States  in 
connection  with,  or  incidental  to,  the  prosecution  of  the  war,  to  any  person, 
partnership,  association,  or  corporation,  or  to  any  foreign  State  or  Government 
engaged  in  war  against  any  Government  with  which  the  United  States  is  at 
war ;  and  any  moneys  received  by  the  United  States  as  the  proceeds  of  any  such 
sale  shall  be  covered  into  the  Treasury  of  the  United  States  and  a  full  report 
of  tlie  same  shall  be  forthwith  submitted  to  Congress. 

Extract  from  Act  of  Congress  Approved  July  9,  1918. 
Sale  of  war  supplies:  That  the  President  be,  and  he  hereby  is,  authorized, 
through  the  head  of  any  executive  department,  to  sell,  upon  such  terms  as  the 
head  of  such  department  shall  deem  expedient,  to  any  person,  partnership,  asso- 
ciation, corporation,  or  any  other  department  of  the  Government,  or  to  any 
foreign  State  or  Government,  engaged  in  war  against  any  Government  with 
which  the  United  States  is  at  war,  any  war  supplies,  material  and  equipment, 
and  any  by-products  thereof,  and  any  building,  plant,  or  factory,  acquired  since 
April  sixth,  nineteen  hundred  and  seventeen,  including  the  lands  upon  which 
the  plant  or  factory  may  be  situated,  for  the  production  of  such  war  supplies, 
materials,  and  equipment  which,  during  the  present  emergency,  may  have  or 
may  hereafter  be  purchased,  acquired,  or  manufactured  by  the  United  States : 
Provided  further,  That  sales  of  guns  and  ammunition  made  under  the  au- 
thority contained  in  this  or  any  other  act  shall  be  limited  to  sales  to  other 
departments  of  the  Government  and  to  foreign  States  or  Governments  engaged 
in  war  against  any  Government  with  which  the  United  States  is  at  war,  and 
to  members  of  the  National  Rifle  Association  and  of  other  recognized  associa- 
tions organized  in  the  United  States  for  the  encouragement  of  small-arms  tar- 
get practice:  Provided  further,  That  a  detailed  report  shall  be  made  to  Con- 
gress on  the  first  day  of  each  regular  session  of  the  sales  of  any  war  supplies, 
material,  lands,  factories,  or  buildings,  and  equipment  made  under  the  author- 
ity contained  in  this  or  any  other  Act,  except  sales  made  to  any  foreign  State 
or  Government  engaged  in  war  against  any  Government  with  which  the  United 

89 


90  UNITED  STATES  LIQUIDATION   COMMISSION. 

States  is  at  war,  sliowiiig  the  character  of  the  articles  sold,  to  whom  sold,  the 
price  received  therefor,  and  the  purpose  for  which  sold :  Provided,  That  any 
moneys  received  by  the  United  States  as  the  proceeds  of  any  such  sale  shall  be 
deposited  to  the  credit  of  that  appropriation  out  of  which  was  paid  the  cost 
to  the  Government  of  the  property  thus  sold,  and  the  same  shall  innnediately 
become  available  for  the  punwses  named  in  the  original  appropriation. 


APPENDIX  II. 

Section  3  of  the  Act  of  Congress  Approved  March  2,  1919. 

That  the  Secretary  of  War,  through  such  agency  as  he  may  designate  or 
establish  is  empowered,  upon  such  terms  as  he  or  it  may  determine  to  be  in  the 
interest  of  the  United  States,  to  make  equitable  and  fair  adjustments  and  agree- 
ments, upon  the  termination  or  in  settlement  or  readjustment  of  agreements 
or  arrangements  entered  into  with  any  foreign  Government  or  Governments 
or  nationals  thereof,  prior  to  November  twelfth,  nineteen  hundred  and  eighteen, 
for  the  furnishing  to  the  American  Expeditionary  Forces  or  otherwise,  for  war 
purposes,  of  supplies,  materials,  facilities,  services  or  the  use  of  property,  or 
for  the  furnishing  of  any  thereof  by  the  United  States  to  any  foreign  Govern- 
ment or  Governments  whether  or  not  such  agreements  or  arrangements  have 
been  entered  into  in  accordance  with  applicable  statutory  provisions;  and  the 
other  provisions  of  this  act  shall  not  be  applicable  to  such  adjustments. 


APPENDIX  III. 


(  General  Orders.  1  War  Department, 

No.  24.         J  Washington,  February  11,  1919. 

UNITED    STATES    LIQUIDATION     COMMISSION WAR    DEPART MK XT. 

1.  The  term  "  war  "  as  used  herein  shall  be  taken  to  mean  the  pi-esent  war 
between  the  United  States  of  America  and  the  nations  associated  with  it  on 
the  one  part  and  the  Imperial  German  Government  and  its  allies  on  the  other 
part.  The  term  *'  United  States  "  as  used  herein  shall  be  taken  to  mean  the 
United  States  of  America. 

2.  In  order  to  facilitate  the  speedy  disposition  of  all  claims  of  every  char- 
acter between  the  United  States  on  the  one  part  and  the  nations  associated  with 
it  in  the  war  and  their  nationals  on  the  other  part,  growing  out  of  or  in  any- 
wise connected  with  the  war ;  and  in  order  to  promptly  dispose  of  all  property 
or  interest  in  property  of  whatsoever  kind  or  nature  belonging  to  the  United 
States,  acquired,  constructed  or  manufactured  in  connection  with  or  incidental 
to  the  war  and  now  located  beyond  its  territorial  limits ;  and  in  order  that  the 
interests  of  the  United  States  and  its  said  associates  shall  be  mutually  sub- 
served;  by  direction  of  the  President  there  is  hereby  created  and  constituted 
a  "United  States  Liquidation  Commission — War  Department,"  as  the  central 
agency  to  supervise  and  direct  the  disposition  of  all  such  claims  and  property, 
clothed  with  the  broad  powers,  charged  with  the  duties  and  constituted  as  here- 
inafter prescribed,  to  be  exercised  in  cooperation  with  the  commander  in  chief 
of  the  American  Expeditionary  forces. 


UNITED   STATES   LIQUIDATION    COMMISSION.  91 

;•.  Tlie  said  Coimnission  shall  possess  the  following  powers: 
id)  To  (leteriiiiiie,  adjust,  modify,  compromise,  and  settle  all  contracts,  obli- 
Lf.irioiis,  commitments,  claims,  or  demands  of  every  nature  whatsoever  within 
the  .inrisdiction  of  the  War  Department  (1)  between  the  United  States  and  any 
loreign  State  or  Government  or  the  nationals  thereof;  or  (2)  asserted  by  the 
United  States  against  any  foreign  State  or  Government  or  the  nationals  thereof; 
or  (8)  asserted  by  any  foreign  State  or  Government  or  the  nationals  thereof 
against  the  United  States;  provided  such  contracts,  obligations,  commitments, 
claims,  or  demands  arise  out  of,  are  connected  with  or  incident  to  the  participa- 
tion of  the  United  States  in  tlie  war. 

(b)  To  sell  or  otlierwise  dispose  of,  upon  such  terms  as  it  shall  determine,  any 
property  of  whatsoever  kind  or  nature  acquired,  constructed  or  manufactured 
by  the  United  States  in  connection  with,  or  incidental  to,  the  participation  of 
the  United  States  in  the  war,  ahd  now  located  beyond  the  territorial  limits  of 
the  United   States  and  its  possessions. 

(c)  To  employ  and  fix  the  compensation  of  such  secretaries,  counsel,  agents, 
factors,  and  employees  as  it  shall  deem  necessary  for  the  proper  exercise  of  its 
powers  and  the  performance  of  its  duties. 

(r/)  To  adopt  rules  and  regulations  governing  its  procedure  and  the  conduct 
of  its  business. 

(e)  To  establish  and  nmintain  offices  at  such  place  or  places  as  it  may  deem 
expedient  and  necessary  for  the  proper  performance  of  its  duties. 

(/)  To  exercise  all  other  powers  necessary  or  incidental  to  the  proper  per- 
formance of  its  duties  as  herein  defined. 

4,  Payments  of  money  to  the  United  States  made  pursuant  to  the  Commis- 
sion's action  shall  be  transferred  to  appropriate  officials  of  the  War  Department, 
or  of  the  American  Expeditionary  Forces,  by  whom  the  same  shall  be  covered 
into  the  Treasury  or  deposited  to  the  credit  of  appropriations  as  required  by 
law  or  regulation. 

o.  The  Commission  shall  cause  to  be  kept  a  full  and  complete  record  of  all 
its  proceedings,  a  copy  of  which  shall  be  transmitted  to  the  Secretary  of  War 
each  montli,  together  with  such  other  reports  as  the  Secretary  of  War  may  from 
time  to  time  prescribe  or  as  may  be  prescribed  by  applicable  provisions  of 
statutes. 

6.  The  act  of  the  majority  of  the  members  of  the  Commission,  when  in  session 
as  such,  shall  be  deemed  to  be  the  act  of  the  Commission,  or,  when  not  in  ses- 
sion, if  such  action  is  assented  to  in  writing  by  a  majority  of  the  members  of 
the  Commission,  it  shall  be  deemed  to  be  the  act  of  the  Commission. 

7.  The  powers  hereby  eonferred  and  the  duties  hereby  prescribed  may  be 
exercised  and  performed  by  the  Commission  either  directly  or  through  existing 
or  hereafter  created  agencies  of  the  American  Expeditionary  Forces  or  of  the 
War  Department  of  the  United  States  or  through  agencies  created  by  the  Com- 
mission. All  existing  agencies  performing  any  of  the  duties  and  exercising  any 
of  the  powers  herein  dealt  with  shall,  unless  otherwise  directed  by  the  Commis- 
sion, continue  to  function  as  heretofore.  While  the  Commission  shall  have  com- 
plete and  exclusive  jurisdiction  and  control  over  the  a:ctivities  of  all  such 
agencies  with  respect  to  the  subject  matter  hereof,  it  is  not  required  to  function 
directly  in  relation  to  such  matters,  activities,  and  transactions  as  in  its  opinion 
should  be  dealt  with  by  such  agencies. 

8.  The  American  Expeditionary  Forces  and  all  other  agencies  of  the  War 
Department  will  furnish  the  Commission  such  reports  and  information  as  it 
may  request,  and  upon  its  request  furnish  it  with  such  officers,  personnel,  trans- 
portation and  other  facilities  as  it  may  require. 


92  UNITED  STATES  LIQUIDATION   COMMISSION. 

9.  The  findings  and  decisions  of  the  Commission  shall  be  final  and  con- 
clusive as  to  all  matters  within  its  jurisdiction. 

10.  L'ntil  further  ordei-ed  the  Commission  shall  be  composed  of  fc»ur  mem- 
bers, as  follows:  Edwin  li.  Parker  (chairman),  Brig.  Gen.  Charles  G.  Dawes, 
H.  H.  Johnson,  Henry  F.  Mollis.  Additions  may  be  made  or  vacancies  filled 
by  appointment  by  the  Secretary  of  War. 

By  order  of  the  Secretary  of  War : 

Peyton  C.  March, 

General,  Chief  of  Staff. 
Official : 

P.  C.  Harris, 

21ie  Adjutant  General. 


APPENDIX  IV. 

General  Orders.  1  War   Department, 

No.  40.         j  Washington,  March  19,  1019. 

OPERATION     OF    UNITED     STATES    LIQUIDATION     COMMISSION     AND    WAR    DEPARTMENT 

CLAIMS    BOABD. 

General  Order  No.  33.  War  Department,  1919,  is  rescinded  and  the  following 
substituted  therefor: 

(1)  The  United  States  Liquidation  Commission — War  Department  constituted 
by  General  Order  No.  24,  War  Department,  1919,  is  hereby  designated  and  estab- 
lished as  the  agency  through  whicli  shall  be  exercised  the  powers  conferred 
upon  the  Secretary  of  War  by  section  3  of  the  act  entitled  "An  act  to  provide 
relief  in  cases  of  contracts  connected  with  the  prosecution  of  the  war,  and  for 
other  purposes,"  approved  March  2,  1919,  excepting  powers  with  relation  to 
agreements  and  arrangements  upon  the  termination  or  in  settlement  of  or 
readjustment  of  agreements  or  arrangements  to  be  performed  in  the  Dominion 
of  Canada  and  entered  into  with  nationals  of  any  Government  foreign  to  the 
United  States  of  America.  Section  3  of  the  act  reads  as  follows :  "The  Secre- 
tary of  War,  through  such  agency  as  he  may  designate  or  establish,  is  em- 
powered, upon  such  terms  as  he  or  it  may  determine  to  be  in  the  interest  of  the 
United  States,  to  make  equitable  and  fair  adjustments  and  agreements,  upon 
the  termination  or  in  settlement  of  or  readjustment  of  agreements,  or  arrange- 
ments entered  into  with  any  foreign  Government  or  Governments  or  nationals 
thereof,  prior  to  November  12,  1918,  for  the  furnishing  to  the  American  Expedi- 
tionary Forces,  or  otherwise,  for  war  purposes,  of  supplies,  materials,  facilities, 
service  or  the  use  of  property,  or  for  the  furnishing  of  any  thereof  by  the  United 
States  to  any  foreign  Government  or  Governments,  whether  or  not  such  agree- 
ment or  arrangement  has  been  entered  into  in  accordance  with  applicable  statu- 
tory provisions ;  and  the  other  provisions  of  this  act  shall  not  be  applicable  to 
such  adjustments." 

(2)  The  Imperial  Munitions  Board,  constituted  and  appointed  by  authority 
of  the  British  Ministry  of  Munitions,  acting  in  conjuncton  with  two  officers 
of  the  United  States  Army,  who  shall  be  appointed  and  known  as  Canadian 
contract  assessors,  is  hereby  authorized  and  empowered  to  exercise,  and  is 
designated  and  established  as  the  agency  through  which  shall  be  exercised, 
in  the  name  of  the  Secretary  of  War  and  by  his  authority,  the  powers  con- 
ferred upon  the  Secretary  of  War  by  the  act  of  Congress  entitled  "An  act 
to  provide  relief  in  cases  of  contracts  connected  with  the  prosecution  of  the 


UNITED   STATES   LIQUIDATION   COMMISSION.  93 

war,  and  for  other  purposes,"  approved  March  2,  1919,  in  so  far  as  the  exercise 
(•]■  such  powers  relates  to  agreements,  express  or  implied,  and  arrangements, 
which  were  entered  into  through  the  agency  of  the  Imperial  Munitions  Board 
and  were  to  be  performed  within  the  Dominion  of  Canada.  All  agreements, 
adjustments,  and  awards  which  shall  be  made  under  the  authority  conferred 
by  this  section  shall  be  made  in  writing,  signed  in  the  name  of  said  Imperial 
Munitions  Board  by  a  member  or  members  thereof  designated  by  said  board 
and  by  one  of  the  aforesaid  Canadian  contract  assessors. 

(3)  The  War  Department  Claims  Board,  constituted  by  the  War  Department 
Circular  No.  26,  dated  January  20,  1919,  is  authorized  and  directed  to  exer- 
cise, and  is  hereby  designated  and  established,  as  the  agency  through  which 
shall  be  exercised,  in  the  name  of  the  Secretary  of  War  and  by  his  authority, 
all  powers  and  duties  conferred  upon  the  Secretary  of  W^ar  by  the  act  of 
Congress  entitled  "  An  act  to  provide  relief  in  cases  of  contracts  connected 
with  the  prosecution  of  the  war,  and  for  other  purposes,"  approved  March  2, 
1919,  except  in  so  far  as  the  right  to  exercise  the  powers  conferred  under  said 
act  has  been  otherwise  authorized  and  delegated  under  paragraphs  1  and 
2  of  this  order,  the  said  duties  and  powers  may  be  performed  and  exercised 
by  the  War  Department  Claims  Board  or  by  any  regular  or  special  member 
or  members  thereof  who  may,  from  time  to  time,  act  under  the  authority  and 
direction  of  the  War  Department  Claims  Board.  For  the  expeditious  perform- 
ance of  its  duties,  the  W^ar  Department  Claims  Board  is  authorized  to  make 
such  use  as  it  may  find  desirable,  of  the  Board  of  Contracts  and  Adjustments, 
the  War  Department  Board  of  Appraisers,  and  any  other  agency  or  agencies 
of  the  War  Department. 

(4)  Lieut.  Col.  H.  G.  Albee,  Engineers,  and  Maj.  Sidney  R.  Underwood, 
Ordnance,  are  hereby  designated  and  appointed  Canadian  contract  assessors 
and  authorized  and  instructed  to  exercise,  in  conjunction  with  the  Imperial 
Munitions  Board,  the  powers  and  duties  provided  for  in  paragraph  2  hereof. 

By  order  of  the  Secretary  of  War: 

Peyton  C.  March, 

General,  Chief  of  Staff. 
Official : 

P.  C.  Harris, 

The  Adjutant  General. 


APPENDIX  V. 


[American  Expeditionary  Forces, 
Headquarters,  Services  of  Supply, 
France,  April  1,  1919. 
1.  Under  the  provisions  of  G.  O.  24,  W.  D.,  c.  s.,  and  G.  O.  No.  40,  c.  s.,  supple- 
mentary  thereto,   the   United    States   Liquidation   Commission — War   Depart- 
ment   (hereinafter  designated   "Commission") — is  designated   as  the  central 
agency  to  supervise  and  direct  the  disposition  of — 

(a)  All  claims  of  every  character  between  the  United  States  on  the  one 
part  and  any  foreign  State  or  Government  and  their  nationals  on  the  other 
part,  growing  out  of  or  in  anywise  connected  with  the  war ;  and 

(&)  All  surplus  property  or  interest  in  such  property  of  whatsoever  kind 
or  nature  belonging  to  the  United  States,  acquired,  constructed,  or  manu- 
factured in  connection  with,  or  incidental  to,  the  war  and  now  located  beyond 
its  territorial  limits. 


94  UNITED   STATES   LIQUIDATION   COMMISSION. 

It  is  not  the  purpose  of  the  Commission  to  create  an  organization  to  super- 
sede existing  agencies  of  the  A.  E.  F.,  which  are  discharging  in  whole  or  in 
part  the  duties  falling  within  the  jurisdiction  of  the  Commission,  but  rather 
to  supervise  and  direct  such  activities  of  existing  agencies,  and  act  through 
and  in  cooperation  with  them. 

2.  The  following  method  of  procedure  has  been  adopted  by  the  Commission 
and  the  commanding  general,  S.  O.  S.,  and  is  published  for  the  guidance  of 
all  concerned  : 

(A)  The  Commission  will,  from  time  to  time,  establish  and  define  the  policies 
to  be  pursued  in  the  adjustment  of  claims  and  in  the  disposition  of  property, 
and  acquaint  the  interested  agencies  of  the  S.  O.  S.  therewith.  It  will  negotiate 
directly  or  through  such  agencies  as  it  may  from  time  to  time  designate,  with 
ministers  or  other  agencies  of  other  Governments,  authorized  to  treat  with 
lespect  to  the  settlement  of  claims  or  the  purchase  or  sale  of  property.  It 
will,  from  time  to  time,  instruct  the  several  agencies  of  the  S.  O.  S.  with 
respect  to  prices,  terms  of  payment,  and  generally  as  to  the  sales  and  dis- 
position of  property.  It  will  prescribe  iniles  to  be  pursued  in  the  preparation 
and  settlement  of  claims  within  the  jurisdiction,  and  will,  from  time  to  time, 
instruct  the  several  agencies  of  the  S.  O.  S.  with  respect  to  the  settlement  of 
such  claims  and  the  sales  of  property  by  them. 

(K)  The  officers  of  the  various  services  of  the  S.  O.  S.  will  collect  complete 
data  with  respect  to  all  claims  which  fall  within  the  jurisdiction  of  the  Com- 
mission and  in  which  such  services  are  concerned  and  will  (unless  expressly 
instructed  to  the  contrary  by  the  Commission)  tentatively  negotiate  a  settle- 
ment of  such  claims,  subject  to  the  approval  of  the  Commission  ;  submitting 
such  claims,  when  fully  developed,  with  a  recommendation  for  settlement  and 
the  reasons  therefor,  through  the  finance  officer  to  the  Commission,  for  action. 
Acting  under  instructions  of  the  Commission,  the  officers  of  the  various  services 
of  the  S.  O.  S.  will  disburse  the  necessary  funds  in  the  payment  of  claims  ap- 
proved by  the  Commission,  under  the  rules  and  regulations  of  the  Treasury 
Department  and  of  their  respective  departments. 

(C)  The  finance  officer,  under  the  direction  of  the  Commission,  will  co- 
ordinate the  activities  of  the  several  services  in  the  collection  of  complete  data 
pertaining  to  claims  within  the  jurisdiction  of  the  Commission,  and  will 
present  the  data  in  such  form  as  may  be  prescribed  by  the  Commission,  for  its 
action. 

(D)  The  officers  of  the  various  services  will  receive,  store,  and  care  for  all 
property  of  the  United  States.  As  soon  as  any  such  property  is,  in  their  opinion, 
available  for  sale  they  will  so  report  to  the  commanding  general,  S.  O.  S., 
and,  when  such  report  is  approved  by  him,  will  notify  the  general  sales  agent 
of  its  availability  for  sale,  giving  him  such  information  with  regard  thereto 
as  he  may  require.  They  will  furnish  necessary  information  to  prospective 
buyers  and  exhibit  to  them  the  property  for  sale  to  the  end  that  it  may  be 
advantageously  disposed  of.  They  will,  under  the  directions  of  the  Commis- 
sion and  of  the  general  sales  agent,  negotiate  sales,  reporting  same  to  the  gen- 
eral sales  agent.  They  will  prepare  for  delivery  or  shipment  the  property  sold 
or  otherwise  disposed  of,  and  deliver  it  to  the  purchaser  or  to  a  transporta- 
tion agency  in  accordance  with  the  terms  of  the  sale.  They  will,  under  the 
directions  of  the  general  sales  agent,  locate  markets  for  sales.  They  will  re- 
ceive moneys  to  be  paid  for  the  property  and  will  deposit  and  account  for 
same  according  to  the  rules  of  the  Treasury  •Department  and  of  their  re- 
spective departments.  They  will  account  for  property  disposed  of  in  ac- 
cordance with  the  established  rules  of  their  respective  departments. 


UNITED   STATES   LIQUIDATION   COMMISSION.  95 

(E)  In  the  absence  of  express  directions  by  the  Commission  to  the  contrary, 
all  sales  will  be  made  by  or  under  the  direction  of  the  ?:eneral  sales  agent  of  the 
s.  O.  S.,  who  will  have  agents  at  various  places  in  Europe,  and  will  locate  and 
develop  markets  for  all  classes  of  property  that  may  be  offered  for  sale.  Re- 
ports with  reference  to  all  classes  of  property  of  the  A.  E.  F.,  available  for  sale, 
\\  ill  be  made  to  the  general  sales  agent  and  by  him  communicated  to  the  Com- 
mission. He  will  pro'perly  advertise  all  sales  and  take  measures  to  prevent 
< onipetitive  selling  by  the  several  services.  He  will,  under  the  general  super- 
\ision  of  the  Commission,  conduct  preliminary  negotiations  with  probable 
iMiyers.  giving  them  such  information  as  they  may  require  to  enable  them  to 
submit  offers  of  purchase;  and  will  consummate  sales  under  the  general  direc- 
tion of  the  Commission. 

(F)  Communications  between  the  Commission  and  the  various  services  of 
the  S.  O.  S.  shall  either  pass  through  the  appropriate  representative  of  the 
commanding  general,  S.  O.  S.  or,  if  the  communication  is  direct,  such  repre- 
sentative shall  be  advised  thereof.  The  appropriate  representative  in  all  mat- 
ters of  claims  shall  be  the  finance  officer ;  in  all  matters  of  sale,  he  shall  be  the 
general  sales  agent.  The  finance  officer  and  the  general  sales  agent  shall  cir- 
culate among  all  interested  d.epartments  or  agencies  of  the  S.  O.  S.  for  their 
guidance,  all  important  rulings,  decisions,  or  statements  of  policy  of  the  Commis- 
sion, having  a  general  application. 

(G)  This  order  does  not  affect  the  payment  of  debts  for  services  performed 
or  property  delivered,  nor,  until  further  orders  of  the  Commission,  shall  any- 
thing herein  contained  affect  the  powers  and  functions  of  the  R.  R.  &  C.  Service, 
which  shall  continue  in  effect  under  existing  orders  or  under  such  subsequent 
orders  as  may  hereafter  be  issued  by  the  commander-in-chief  or  by  the  com- 
manding general,  S.  O.  S. 

(H)  Any  power  or  authority  herein  assigned  to  the  general  sales  agent,  the 
finance  officer,  or  the  chiefs  of  services,  or  to  their  subordinates,  may  be  ex- 
tended, withdrawn  or  modified  at  will  by  the  Commission,  or  exercised  directly 
by  it.  when,  in  its  judgment,  such  action  is  desirable.  The  powers  and  authority 
as  regards  sales,  granted  herein  to  the  Services  or  their  representatives,  may  be 
exercised  by  the  general  sales  agent,  when,  in  his  opinion,  the  best  interests  of 
the  Government  will  be  served  thereby. 

3.  All  orders  or  parts  of  orders  in  conflict  with  the  above  instructions  are 
hereby  revoked. 

4.  Section  I,  General  Orders,  No.  59,  S.  O.  S.,  A.  E.  F.  (1918),  is  revoked  and 
the  Advisory  Liquidation  Board  therein  provided  for  is  dissolved. 

By  command  of  Maj.  Gen.  Harbord : 

W.  D.  Connor,  Chief  of  Staff. 
Official : 

L.  H.  Bash,  Adjutant  General. 


APPENDIX  VI. 

The  Categories. 


I.  Clothing  and  textiles: 

A.  Cotton  and  woolen  materials,  raw  and  fabricated. 

B.  Clothing,  caps,  boots,  wearing  apparel,  and  insignia. 

C.  Blankets,  mattresses,  pillows,  and  bedding. 

D.  Carpets,  rugs,  linoleum,  and  draperies. 

E.  Tents,  tarpaulins,  and  tent  accessories. 

F.  Jute,  bagging,  sacks,  and  burlap. 


96  UNITED  STATES  LIQUIDATION  .COMMISSION. 

II.  Subsistence  supplies: 

A.  Flour. 

B.  Fresh,  smoked,  and  cured  meats. 

C.  Fresh  fruits  and  vegetables. 

D.  Canned  goods. 

E.  Other  food  supplies. 

F.  Tobacco,  cigarettes,  cigars,  and  smokers'  articles. 

G.  Hay,  feed,  and  other  forage. 
H.  Coal  and  coke. 

t  Other  fuel. 

III.  Kitchen  utensils  and  household  furnishings: 

A.  Kitchen  and  dining-room  furniture. 

B.  Cooking  stoves  and  appliances. 

C.  Heating  stoves  and  appliances. 

D.  Household  and  cooking  utensils. 

E.  Tableware  and  cutlery. 

F.  Miscellaneous  house  and  camp  articles  and  supplies. 

G.  Beds,  cots,  and  other  furniture. 

IV.  Machinery,  metals,  tools,  and  hardware: 

A.  Steam  engines,  boilers,  and  parts. 

B.  Air-compressor  parts. 

C.  Refrigerating  machinery  and  supplies. 

D.  Machines,  tools,  and  other  power  machinery  and  parts. 

E.  Other  shop  and  foundry  equipment. 

F.  Gas  and  gasoline  engines  and  parts. 

G.  Construction  contractors'  machinery  and  plants. 
I.  Metals,  raw  and  fabricated. 

L.  Pipe  and  pipe  fittings. 

M.  Wire  rope  and  guy  wire. 

N.  Small  tools  and  machines. 

O.  Nails,  bolts,  screws,  rivets,  nuts,  and  washers. 

P.  Locks,  hinges,  and  other  building  hardware. 

Q.  Lamps  and  lanterns  and  parts. 

R.  Picks  and  shovels. 

S.  Blacksmith  tools. 

T.  Belting  and  packing. 

U.  Hemp,  rope,  cordage,  and  twine. 

V.  Tanks,  cans,  and  buckets   (metal). 

W.  Safes  and  steel  cabinets. 

X.  Pumps  and  water-supply  apparatus. 

Y.  Miscellaneous  materials  and  supplies. 

Z.  Horseshoes  and  nails. 
AA.  Agricultural  implements,  machinery,  and  appliances. 
BB.  Hose,  nozzles,  couplings,  and  fastenings. 

V.  Building  materials: 

A.  Cement. 

B.  Lime. 

C.  Sand,  gravel,  and  crushed  rock. 

D.  Brick  and  tile. 

E.  Roofing  materials. 

F.  Window  glass. 

G.  Other  materials. 


UNITED  STATES  LIQUIDATION  COMMISSION.  97 

VI.  Lumber  and  other  forest  products: 

A,  Rough  and  milled  lumber. 

B.  Ties. 

D.  Piling. 

E.  Telephone  and  telegraph  poles. 

F.  Bridge  timbers. 

G.  Stake  and  fence  posts. 
H.  Trench  framing  timbers. 
J.  Brackets  and  cross  arms. 
K.  Other  wood  products. 

VII.  Railway  and  dock  equipment: 

A.  Locomotive  and  cars. 

B.  Locomotive  cranes. 

C.  Work  equipment  (miscellaneous). 

D.  Rail. 

E.  Frogs  and  switches. 

F.  Other  track  material. 

G.  Hoisting  and  conveying  machinery. 
H.  Other  railroad  and  dock  equipment. 
J.  Floating  equipment. 

VIII.  Transport  equipment: 

A.  Automobiles  and  motor  trucks. 

B.  Tires  and  tubes. 

C.  Automobile  parts. 

D.  Automobile  accessories  and  tools. 

E.  Bicycles  and  motor  cycles  and  supplies. 

F.  Horses  and  mules. 

G.  Harness  and  saddlery. 

H.  Wagons,  carts  and  trailers. 

J.  Wagon  accessories  and  miscellaneous  supplies. 

IX.  Hospital  and  toilet  supplies  and  chemicals: 

A.  Drugs  and  medicines  (Medical  Department). 

B.  Surgical  instruments    (Medical  Department). 

C.  Hospital  apparatus  and  supplies  (Medical  Department). 

D.  Chemicals  and  disinfectants. 

E.  Soaps  and  other  toilet  articles  and  preparations. 

F.  Ordnance  and  Gas  Service  chemicals. 

X.  Photographic,  measuring,  and  musical  instruments: 

A.  Cameras. 

B.  X-rays  and  supplies. 

E.  Photographic  material  and  supplies. 

F.  Surveying  instruments  and  compasses. 
H.  Field  glasses  and  telescopes. 

I.  Drafting  instruments. 

J.  Clocks  and  watches.  ^ 

K.  Other  instruments  and  supplies. 

L.  Musical  instruments. 

XI.  Electrical  equipment  and  supplies. 

A.  Dynamos. 

B.  Generator  sets 

C.  Motors. 

D.  Transformers. 
183176—20 7 


98  UNITED  STATES  LIQUIDATION  COMMISSION. 

XI.  Electrical  equipment  and  supplies — Continued. 

E.  Interior  wiring  supplies. 

F.  Switchboards  and  accessories. 

G.  Line  materials  and  supplies. 

H.  Copper  and  iron  wire  and  cable. 

I.  Batteries,  bells,  buzzers,  and  push  buttons. 

J.  Insulating  materials. 

K.  Telephone  and  telegraph  equipment  and  accessories. 

L.  Electric  lamps. 

M.  Other  apparatus  and  equipments. 

N.  Wireless  apparatus  and  equipments. 

XII.  Oils,  gasoline,  and  paints: 

A.  Gasoline. 

B.  Other  fuel  oils. 

C.  Lubricating  oils. 

D.  Lubricating  greases. 

E.  Linseed  oil. 

F.  Turpentine. 

G.  Color  materials  and  mixed  paints. . 
H.  White  and  red  lead. 

K.  Varnishes  and  shellacs. 

L.  Painters'  tools  and  supplies. 

XIII.  Ordnance  and  gas  equipment  and  supplies : 

A.  Guns  and  accessories. 

B.  Gun  carriages  and  caissons. 

C.  Rifles  and  pistols. 

D.  Ammunition. 

E.  Target  supplies. 

F.  Gas  masks  and  other  protecting  devices. 

G.  Flame  throwers,  hand  grenades,  and  gas  bombs. 
H.  Other  equipment  and  supplies. 

XIV.  Blasting  apparatus  and  supplies: 

A.  Dynamite. 

B.  Powder. 

C.  Blasting  appliances  and  accessories. 

XV.  Printing  plant  and  supplies: 

A.  Printing  presses  and  appliances. 

B.  Paper  cutters,  rulers,  and  folders. 

C.  Printers'  inks. 

D.  Type. 

E.  Printing  paper. 

F.  Other  printing-office  supplies. 

XVI.  Oflace  fixtures,  stationery,  and  supplies: 

A.  Office  furniture  and  fixtures. 

B.  Pencils,  pens,  and  ink. 

C.  Paper  and  envelopes. 

D.  Carbon  paper. 

E.  Typewriters  and  supplies. 

F.  Drafting-room  material. 

G.  Blackboard  and  chalk. 
H.  Miscellaneous  supplies. 
I.  Blank  and  ruled  books. 

J.  Calculating  and  numbering  machines. 
K.  Duplicating  machines  and  supplies. 
L.  Rubber  stamps  and  pads. 


UNITED  STATES  LIQUIDATION   COMMISSION.  99 

XVII.  Hides  and  leather : 

A.  Hides. 

B.  Leather. 

C  Leather  articles. 

XVIII.  Air  Service  apparatus  and  equipment: 

A.  Aeroplanes  and  appliances. 

B.  Balloons  and  appliances. 

C.  Hangars  and  sheds. 

D.  Aeronautical  textbooks  and  pubfications. 

E.  Other  apparatus  and  supplies. 


100 


UNITED  STATES  LIQUIDATION  COMMISSION. 


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APPENDIX  IX. 


103 


Form  of  "  Eeceipt  "  Given  by  French  in  Taking  Over  United  States  Stocks 

Before  the  Sale. 


(place.) 


(localitI;.) 


1.  Be  it  known  that  on  this  

day  of  ,   1919,   the  War 

Department  of  the  United  States  of 
America  has  delivered  to  the  Govern- 
ment of  France  the  property  described 
and  the  location  of  which  is  men- 
tioned or  fixed  in  the  attached  in- 
ventory, marked  for  identification 
"  Exhibit  A,"  the  bottom  of  each  sheet 
being  initialed  by  the  undersigned 
American  and  French  officers,  and 
made  a  part  hereof. 

2.  From  and  after  the  date  hereof 
the  French  Government  will  hold  the 
said  property  for,  but  without  expense 
to,  the  United  States  of  America,  sub- 
ject to  the  directions  of  the  United 
States  Liquidation  Commission,  War 
Department,  pending  negotiations  be- 
tween the  said  Commission  and  repre- 
sentatives of  the  French  Government 
for  its  purchase  by  the  French  Gov- 
ernment. 

For  the  War  Department  of  the 
United  States  of  America. 

By 

(American   Officer) 
For  the  Republic  of  France. 

By 

(French  Officer.) 


1.  II  est  reconnu  que  ce jour 

de  1919,  le  Department 

de  la  Guerre  des  ]6tats-Unis  d'Ame- 
rique  a  delivrg  au  Gouvernement  Fran- 
gais  la  proprigtS  decrit^  et  dont  la  lo- 
cation est  mentionnee  oil  fixee  dans 
I'inventaire  ci-joint,  marque  pour  iden- 
tification "  Pi§ce  A,"  le  bas  de  chaque 
page  portant  les  initiales  des  officiers 
Americains  et  Frangais  soussign^s,  et 
formant  partie  de  ce  recu. 

2.  D'a  partir  de  la  date  ici  port^e,  la 
Gouvernement  Frangais  retiendra  la 
dite  propi^t^  pour  le  Gouvernement 
des  ifetats-Unis  d'Amerique,  mais  sans 
f rais  pour  lui,  soumis  aux  instructions 
de  la  Commission  de  Liquidation  des 
]6tats-Unis,  Department  de  la  Guerre, 
en  attendant  des  negociations  entre  le 
dite  Commission  et  les  representants 
du  Gouvernement  Frangais  pour 
I'achat  de  cette  propri§t6  par  le  Gou- 
vernement Frangais. 

Pour  le  Department  de  la  Guerre 
des  ;fitats-Unis  d'Amerique. 

Par 

(Officier  Americain.) 
Pour  la  Republique  Frangais. 

Par 

(Officier  Frangais.) 


APPENDIX  X. 

<1)     Contract    of    Sale,    United    States    to    France,    August    1,    1919 — 
The  Bulk  Sale  to  France. 


This  contract  entered  into  this  first 
day  of  August  A.  D.  1919  by  and  be- 
tween the  United  States  of  America 
(hereinafter  called  America),  acting 
through  the  United  States  Liquidation 
Commission — War  Department,  of  the 
one  part;  and  the  Republic  of  France 
(hereinafter    called    France),    acting 


Entre  les  Etats-Unis  d'Amerique 
(ci-apres  denommee  Amerique)  et  par 
I'intermediaire  de  la  United  States 
Liquidation  Commission,  War  Depart- 
ment, d'une  part,  et  la  Republique 
Francaise  (ci-apres  denommee  France) 
et  par  I'intermediaire  de  M.  le  Sous- 
Secretaire  d'Etat  aux  Finances  d'autre 


104 


UNITED  STATES  LIQUIDATION  COMMISSION. 


through  Le  Sous-Secretaire  d'Etat  aux 
Finances,  of  the  other  part,  wit- 
nesseth : 

That  whereas,  America  is  the  owner 
of  certain  property  now  located  in 
France  which  was  imported  into,  ac- 
quired or  constructed  in  France  since 
April  6,  1917,  by  the  War  Department 
of  the  United  States  of  America  (here- 
inafter called  War  Department)  ;  and 

Whereas,  it  is  deemed  advantageous 
to  both  Governments  that  America  sell 
and  France  purchase  said  property; 

Now  therefore,  in  consideration  of 
the  premises  and  for  the  other  consid- 
erations herein  stated,  it  is  mutually 
agreed,  as  follows: 


part,  il  a  ete  conclu  a  la  date  du  l**" 
Aotit  1919  le  contrat  suivant : 

Etant  donne  que  I'Amerique  possede 
en  France  une  certaine  quantite  de 
biens  en  exeedent  qui  ont  ete  importes, 
achetes  ou  construits  en  France  depuis 
le  6  Avril  1917  par  le  Department  de  la 
Guerre  des  Etats  -  Unis  d'Amerique 
(ci-apres  denomme;  War  Department),, 
et  etant  donne  qu'il  est  juge  avanta- 
geux  pour  les  deux  Gouvernements 
que  I'Amerique  vende  et  que  la  France 
achete  les  dits  biens,  la  convention  sui- 
vante  a  ete  agrees  d'un  commun  accord 
en  egard  aux  considerations  ci-dessus 
et  aux  considerations  exposees  dans  le 
present  document: 


AETICLE    ONE. 

Description  of  property. — ^America 
agrees  to  and  does  hereby  sell  to 
France  without  warranty  of  quantity, 
quality  or  condition,  and  subject  to  the 
reservations,  exceptions  and  conditions 
hereinafter  set  forth,  and  France 
agrees  to  and  does  hereby  purchase 
from  America,  all  of  the  property  now 
located  in  France  and  now  owned  by 
the  War  Department,  described  as  fol- 
lows : 

a.  All  of  the  buildings,  structures, 
docks,  warehouses,  telephone  and  tele- 
graph lines,  railroads  and  other  instal- 
lations of  every  kind  and  character 
constructed  or  acquired  in  France  since 
April  6,  1917,  together  with  the  leases, 
appurtenances  and  equipment  apper- 
taining thereto ;  and 

b.  All  of  the  movable  property,  con- 
sisting of  material,  equipment  and  sup- 
plies imported  into  or  acquired  in 
France  since  April  6, 1917. 

ABTICLE  TWO. 

Exceptions  and  reservations. — 
America  reserves  from  the  property 
described  in  Article  One  hereof  (which 
is  sold  subject  to  the  following  ex- 
ceptions and  conditions)  property  as 
follows : 


ABTICLE    I. 

Description  du  materiel.' — L'Amer- 
ique  consent  a  vendre  et  vend  effective- 
ment  a  la  France  par  le  present  acte- 
sans  guarantie  de  quantite,  de  qualite^ 
ou  d'etat  actuel  et  sous  reserve  des^ 
exceptions  et  des  conditions  enoncees 
ci-apres  et  la  France  accepte  d'acheter 
effectivement  par  le  present  acte  a 
I'Amerique  tons  les  biens  actuellement 
situes  en  France  et  appartenant  au 
War  Department  dont  la  description- 
suit: 

a.  Tous  les  batiments,  constructions, 
docks,  magasins,  lignes  telephoniques 
et  telegraphiques,  lignes  de  chemins  de 
fer  et  autre  installations  de  tout  genre 
et  de  tout  nature  construits  ou  acquis^ 
en  France  depuis  le  6  Avril  1917,  en 
meme  temps  que  les  baux,  les  depend-^ 
ances  et  amenagements  y  correspond- 
ant. 

b.  Tous  les  biens  mobiliers  consist- 
ant  en  materiels,  equipements  et  ap- 
provisionnements  importes  ou  achetes 
en  France  depuis  le  6  Avril  1917. 

ABTICLE  II. 

Exceptions  et  reserves. — L'Amerique 
excepte  des  biens  decrits  dans  TArticle, 
ci-dessu,  (lesquels  sont  vendus  sous  les 
reserves  et  conditions  indiquees  ci- 
apres),  ceux  de  ces  biens  dont  la  de- 
scription suit: 


UNITED  STATES  LIQUIDATION   COMMISSION. 


105 


a.  All  animals. 

t).  Undelivered  material,  equipment 
and  supplies  which  America  has 
already  sold  or  contracted  to  sell  (1) 
to  other  nations,  (2)  to  relief  asso- 
ciations or  organizations,  (3)  to 
Spanish  Company  for  export  to 
and  distribution  in  Spain,  and 
(4)  to  an  English  syndicate  of 
motor  transport  of  English  manufac- 
ture only,  for  return  to  and  distribu- 
tion in  England,  all  aggregating  in 
selling  value  approximately  Seventy- 
seven  Million,  Two-hundred  and 
Sixty-five  Thousand,  Five-hundred  and 
Ninety-seven  Dollars  and  Eighty-three 
cents  ($77,265,597.83)  ; 


c.  Equipment,  material  and  supplies 
forming  a  part  of  the  equipment  of 
the  individual  soldier  or  of  the  mili- 
tary units  which  have  been  or  may  be 
hereafter  withdrawn  from  France  for 
return  to  the  United  States : 

d.  Material,  equipment  and  supplies 
now  in  France  needed  by  America  and 
already  ordered  returned  to  America 
for  the  use  of  the  War  Department, 
of  the  estimated  cost  value  of  fifteen 
million  dollars   ($15,000,000.00). 


e.  Subsistence  and  supplies  neces- 
sary to  meet  the  requirements  of  the 
American  Expeditionary  Forces  and 
other  War  Department  organizations 
so  long  as  they  are  in  France,  which 
subsistence  and  supplies  are  now 
located  both  in  depots  and  points  other 
than  depots;  such  stocks  now  in 
depots  being  of  the  estimated  cost 
value  of  Four  Million  Dollars 
($4,000,000.00)  ;  and 


f.  Medical,  surgical  and  hospital 
supplies  and  supplementary  and  die- 
tary foodstuffs  needed  in  the  treat- 
ment of  the  sick  and  injured,  reserved 
for  the  use  of  the  American  Red  Cross 


a.  Tous  les  animaux. 

b.  Les  materiels,  equipements,  ap- 
provisionnements  que  I'Amerique  a 
deja  vendus  ou  qu'elle  s'est  engagee  a 
vendre,  mais  qu'elle  n'a  pas  encore 
livres  (1)  a  d'autres  Etats  (2)  a  des 
associations  ou  organizations  chari- 
tables  (3)  a  une  Compagnie  Espagnole 
aux  fins  d'exportation  et  de  distribution 
en  Espagne,  et  (4)  a  un  syndicat  Ang- 
lais, en  ce  qui  concerne  du  materiel 
automobile,  uniquement  de  fabrica^on^ 
Anglaise,  materiel  destine  a  etre  rem- 
ports  et  distribue  en  Angleterre,  la 
valeur  marchande  de  tout  ce  qui 
est  indique  ci-dessus  s'elevant  ap- 
proximativement  a  Soixante  dix-sept 
millions,  deux  cent  soixante  cinq 
mille,  cinq  cent  quatre  vingt-dix 
sept  dollars  quatre  vingt  trois  cents 
($77,265,597.83). 

c.  L'Equipement,  le  materiel  et  les 
approvisionements  qui  font  partie  de 
I'equipement  individuel  de  I'homme  ou 
des  unites  militaires  qui  ont  ete  ou 
seront  retires  de  France  pour  retour- 
ner  aux  Etats-Unis. 

d.  Les  materiels,  equipments  et 
approvisionnements  actuellement  en 
France  necessaires  a  I'Amerique  et  qui 
d'apres  des  instructions  precedement 
recues  doivent  etre  expedies  aux  Etats- 
Unis  pour  I'usage  du  War  Department 
et  dont  L'estimation  au  prix  de  revient 
s'eleve  a  quinze  millions  de  dollars 
($15,000,000.00). 

e.  Les  fournitures  et  approvisionne- 
ments necessaires  pour  subvenir  aux 
besoins  des  Forces  Expeditionnaires 
Americaines  et  des  autres  organisa- 
tions dependant  du  War  Department 
tant  qu'elles  resteront  en  France, 
fournitures  et  approvisionnements  qui 
sont  actuellement  situes  dans  des 
depots  et  dans  des  points  autres  que 
les  depots;  le  total  des  approvisionne- 
ments dans  les  depots  etant  estime,  au 
prix  de  rivient  a  quatre  millions  de 
dollars  ($4,000,000.00)  ;  et 

f.  Les  approvisionnements  medicaux, 
chirurgicaux  et  hospitallers  ainsi  que 
les  denrees  alimentaires  de  regime 
necessaires  dans  le  traitement  des 
malades  et  blesses,  reserves  pour  I'usage 


106 


UNITED  STATES  LIQUIDATION  COMMISSION. 


in  connection  with  its  activities  in 
Europe,  of  tlie  estimated  cost  value  of 
ten  million  dollars  ($10,000,000.00). 
Should  the  Secretary  of  War  of  the 
United  States  of  America,  or  his 
authorized  representative,  hereafter 
request  that  France  re-sell  to  America 
additional  property  of  similar  nature 
for  the  use  of  the  American  Red 
Cross,  then  in  such  event  France 
agrees  to  re-sell  same  to  America  so 
long  as  it  is  held  by  France  unsold, 
delivering  it  to  the  American  Red 
Cross  at  the  same  price  at  which 
France  has  valued  such  property  in 
making  this  purchase,  so  that  the  re- 
sale shall  be  at  cost  to  France  without 
profit.  America  agrees  to  give  France 
credit  on  the  bonds,  hereinafter  men- 
tioned, for  any  property  so  re-sold. 


de  la  Croix-Rouge  Americaine  pour  son 
oeuvre  en  Europe,  dont  I'ensemble  est 
evalue,  au  prix  de  revient,  a  10  mil- 
lions de  dollars  ($10,000,000.00).  Si 
le  Secretaire  d'Etat  a  la  Guerre  des 
Etats-Unis  d'Amerique  ou  son  Repre- 
sentant  autorise  demandait  dans  la 
suite  a  la  France  de  lui  revendre  pour 
I'usage  de  la  Croix  Rouge  Americaine 
un  surplus  d'Approvisionnements  du 
meme  genre,  la  France  consent  dans  ce 
cas  a  revendre  ces  approvisionnements 
aussi  long  temps  qu'elle  les  conservera 
invendus,  en  les  livrant  a  la  Croix- 
Rouge  Americaine  au  meme  prix  que 
la  France  I'a  estime  en  effectuant  son 
achat,  de  telle  sorte  que  la  revente 
sera  faite  par  la  France  au  prix  cou- 
tant  sans  benefice.  L'Amerique  est 
d'accord  pour  crediter  la  France  sur 
les  obligations  dont  il  est  question  plus 
loin  pour  tout  le  materiel  revendu  de 
la  sorte. 


ABTICLE  THREE. 

Consideration. 


ABTICLE  in. 
Prix  et  engagements  speciaux. 


a.  Bonds, — In  addition  to  the  other 
considerations  herein  enumerated, 
France  agrees  to  pay  for  the  above 
described  property  the  sum  of  four 
hundred  million  dollars  ($400,000,000) 
to  be  evidenced  by  bonds  of  the  Re- 
public of  France,  dated  August  1,  1919, 
bearing  interest  from  August  1,  1920, 
at  the  rate  of  five  per  centum  (5%) 
per  annum,  interest  payable  in  equal 
semi-annual  installments  on  February 
1st  and  August  1st  in  each  year,  said 
bonds  maturing  ten  (10)  years  after 
date,  both  principal  and  interest  pay- 
able in  dollars  to  the  United  States  of 
America,  or  its  assigns,  at  Washing- 
ton, D.  C,  in  gold  coin ;  or,  at  the  elec- 
tion of  America,  payable  in  francs  of 
the  Republic  of  France  at  the  cable 
buying  rate  as  fixed  by  the  Federal 
Reserve  Bank  of  New  York  on  the 
New  York  market  at  noon  of  the  due 
date  thereof.  Said  bonds  shall  be  in 
such  form  and  of  such  denominations 
as  may  be  prescribed  by  agreement  be- 


a.  Obligations. — En  plus  des  autres 
engagements  enumeres  ici,  la  France 
consent  a  payer  pour  le  materiel  de- 
crit  plus  haut,  la  somme  de  quatre 
cents  millions  de  dollars  ($400,000,- 
000.00)  representes  par  des  obliga- 
tions de  la  Republique  Francaise,  en 
date  du  ler  Aout  1919,  portant  interet 
du  ler  Aout  1920  au  taux  de  cinq  pour 
cent  (5%)  I'an,  interets  payable  en 
paiements  a  termes  semestriels  et 
egaux,  le  ler  Fevri^r  et  le  ler  Aout  de 
chaque  anne,  les  dites  obligations  ar- 
rivant  a  amortissement  dix  (10)  ans 
apres  la  date  d'emission,  le  capital  et 
les  interets  payables  en  dollars  aux 
Etats-Unis  d'Amerique  ou  a  ceux  qu'ils 
designeront  a  Washington,  District  of 
Columbia,  en  monnaie  d'or,  ou  au  choix 
de  I'Amerique,  payables  en  francs  de  la 
Republique  Francaise  au  taux  d'achat 
fixe  par  cable  par  la  Federal  Reserve 
Bank  de  New  York,  sur  le  marche 
de  New  York,  a  midi  de  la  djate 
d'esscheance.      Les    dites    obligations 


UI^ITED  STATES  LIQUIDATION  COMMISSION. 


107 


tween  the  Treasury  Departments  of 
America  and  of  France,  and  shall  be 
delivered  within  ninety  (90)  days 
from  August  1st,  1919. 


b.  Claims  and  rentals. — France  as- 
sumes the  payment  of  all  rentals 
which  shall  accrue  subsequent  to 
August  1st,  1919,  on  account  of  the 
occupancy  of  the  installations  of  ev- 
ery character  purchased  by  it  from 
America.  All  requisition,  damage  and 
restoration  claims  of  every  nature 
whatsoever  connected  with  or  growing 
out  of  the  use  and  occupation  of  said 
installations  have  already  been  taken 
into  account  by  France  in  estimating 
the  utilization  value  of  said  installa- 
tions, and  deduction  has  been  made 
accordingly  from  the  purchase  price 
mentioned  in  subdivision  "  a"  of  this 
Article  Three  hereof;  and  France  as- 
sumes the  payment  of  and  agrees  to 
hold  America  harmless  against  all 
such  claims. 


c.  Waiver  of  claims. — France  waives 
all  claims  of  every  nature  which  it  has 
or  may  have  against  America  for  Na- 
tional taxes  on  account  of  the  importa- 
tion of  or  transactions  in  relation  to 
property  heretofore  imported  or  ac- 
quired by  America  in  France  since 
April  6th,  1917. 


seront  emises  dans  la  forme  ei  sous  la 
denomination  qui  sera  prescrite  d'ac- 
cord  entre  les  Ministres  des  Finances 
des  Gouvernements  Americain  et  Fran- 
cais.  L'emission  des  obligations  aura 
lieu  dans  les  quatre-vingt-dix  (90) 
jours  a  partir  de  la  date  du  ler 
Aout  1919. 

b.  Reclamations  et  locations. — La 
France  prendra  a  sa  charge  le  paie- 
ment  a  partir  de  la  date  du  ler  Aout 
1919,  de  tons  les  loyers  d'occupation_ 
d'installations  de  toute  nature  qu'elle 
achete  aux  Etats-Unis  d'Amerique. 
Tons  rais  de  requisitions,  de  dom- 
mages  et  de  remise  en  etat  de  toute 
nature  qui  peuvent  etre  dus  pour 
I'usage  et  I'occupation  de  ces  installa- 
tions, ont  ete  deja  pris  en  considera- 
tion par  la  France  dans  I'estimation 
qu'elle  a  faite  de  la  valeur  d'utilisa- 
tion  des  dites  installations  et  une  de- 
duction correspondante  a  ete  operee 
sur  le  prix  d'achat  mentionne  dans  la 
sub-division  "  a "  de  I'Art.  Ill  ci- 
dessus;  En  consequence  la  France 
rendre  a  sa  charge  le  paiement  de  ces 
frais  et  s'en  gage  a  ce  qu'aucune  re- 
clamation ne  soit  faite  a  I'Amerique  a 
leur  sujet. 

c.  Renoncement  aux  Reclamations. — 
La  France  renonce  a  toutes  reclama- 
tions de  toute  nature  qu'elle  a  ou  pent 
avoir  contre  I'Amerique  pour  des 
taxes  d'Etat  provenant  d'importations 
ou  de  transactions  relatives  aux  biens 
jusqu'ici  importes  ou  achetes  par 
TAmerique  en  France,  depuis  le  6 
Avril,  1917. 


ARTICLE  FOUB. 


ARTICLE    IV. 


Title  and  possession. — a.  Title  to  the 
property  hereinbefore  mentioned,  sold 
by  America  to  France,  shall  pass  to 
France  upon  the  signing  of  this  con- 
tract. Delivery  of  possession  shall  be- 
gin immediately  and  shall  be  com- 
pleted within  thirty  days  from  August 
1st,  1919.  So  long  as  said  property  is 
in  the  possession  of  America  it  shall 
be  held  at  the  joint  risk  of  America  and 
France;   provided,   however,   that   the 


Titre  et  possession. — a).  La  pro- 
priete  des  biens  vendus  par  le  present 
acte  sera  transferee  a  la  France  par  la 
signature  de  ce  contrat.  La  prise  de 
possession  commencera  immediate- 
ment,  et  devra  etre  terminee  dans  les 
trente  (30)  jours  a  partir  du  ler  Aout 
1919.  Aussi  longtemps  que  ces  biens 
seront  conserves  par  I'Amerique,  il  le 
seront  aux  risques  communs  de 
I'Amerique   et   de   la   France,   pourvu 


108 


UNITED  STATES  LIQUIDATION  COMMISSION. 


risk  to  America  shall  terminate  abso- 
lutely with  August  31st,  1919,  whether 
delivery  has  at  that  time  been  taken 
by  France  or  not.  At  the  time  of  de- 
livery of  possession  a  receipt  in  sub- 
stantially the  following  form  shall  be 
signed  .by  representatives  of  the  re- 
spective Governments: 

"Be  it  known  that  on  this  

day  of ,  1919,  the  United 

States  of  America,  War  Department, 
has  delivered  to  the  accredited  repre- 
sentative of  the  Republic  of  France, 
on  authority  of  the  United  States 
Liquidation  Commission — War  Depart- 
ment, all  the  property,  both  fixed  and 
movable,  belonging  to  the  United 
States  of  America,  War  Department, 
embraced  or  located  in  installation, 
depot  or  park  known  as  De- 
partment       Project  No.   

as  shown  on  the  Jadwin  Report  of  In- 
stallation, page  — . 

"  Executed  in parts,  each  hav- 
ing the  full  force  and  effect  of  an 
original." 

b.  France  hereby  grants  to  America, 
rent  free,  the  temporary  use  of  such 
installations  and  moveables  purchased 
by  France  in  accordance  |with  the 
terms  of  this  contract  as  may  be  re- 
quired by  the  American  Expeditionary 
Forces  and  other  War  Department  Or- 
ganizations so  long  as  they  are  in 
France  or  as  may  be  necessary  to 
complete  the  liquidation  of  the  affairs 
of  the  War  Department;  provided, 
however,  that  so  long  as  such  installa- 
tions and  movables  are  retained  by 
America  for  its  use  under  the  terms  of 
this  subdivision  "  b  "  of  Article  Four 
hereof,  they  shall  be  held  at  the  risk  of 
America. 


In  witness  whereof,  on  the  day  and 
year  first  above  written,  this  contract 
has  been  executed  in  four  parts,  each 
having  the  full  force  and  effect  of  an 
original,  by  the  United  States  of 
America,  acting  through  the  United 
States  Liquidation  Commission — War 


toutefois  que  le  risque  supporte  par 
I'Amerique  se  termine  d'une  maniere 
absolue  au  31  Aout  1919,  que  la  prise 
de  possession  ait  ete,  a  cette  date, 
operee  ou  non  par  la  France.  Au  mo- 
ment de  la  prise  de  posession  un  recu 
dans  la  forme  suivante  sera  signe  par 
les  Representants  des  Gouvernements 
interesses : 

"  Qu'il  soit  connu  que  le  jour 

de  1919,  les  Etats-Unis 

d'Amerique,  Ministere  de  la  Guerre,  ont 
remis  au  Representant  accredite  de  la 
Republique  Francaise,  sur  ordre  de  la 
Commission  de  Liquidation  des  Etats- 
Unis,  Ministere  de  la  Guerre,  tout  le 
materiel,  fixe  et  transportable,  apperte- 
nant  aux  E'tats-Unis  d'Amerique,  De- 
partment de  la  Guerre,  compris  ou 
situe  dans   I'installation,  le  depot  ou 

le  par  connu  sous  le  nom  de 

Department Project  No. 

comme  indique  sur  le  Rapport  de 
Jadwin  des  Installations,  page  — . 

"  Execute     en    exemplaires 

chacun  ayant  pleine  vigueur  et  force 
d'originjil." 

b. )  La  France  consent  par  le  present 
contrat  a  accorder  a  I'Amerique,  sans 
paiement  de  loyer,  I'usage  de  telle  par- 
tie  des  installations  et  des  biens  mau- 
bies  achetes  par  la  France  suivant  les 
termes  de  ce  contrat,  qui  pourra  etre 
necessaire  aux  Forces  Expedition- 
naires  Americaines  et  autres  Services 
du  War  Department  et  sera  demandee 
par  eux,  aussi  longtemps  que  eel  a  sera 
juge  necessaire  pour  terminer  la  liqui- 
dation des  affaires  du  War  Depart- 
ment; a  condition  toutefois  qu'aussi 
longtemps  que  ces  installations  et  ma- 
teriels  seront  conserves  par  I'Amerique 
pour  son  usage,  suivant  les  termes  de 
la  subdivision  "b"  de  I'Art.  IV  ci- 
dessus,  ils  le  seront  aux  risques  de 
I'Amerique. 

En  foi  de  quoi,  a  la  date  de  I'anne 
indiquee  ci-dessus,  entete  ce  contrat  a 
ete  dresse  en  quatre  exemplaires,  pour 
valoir  chacun  d'eux  comme  original 
par  les  Etats-Unis  d'Amerique,  agis- 
sant  par  I'intermediaire  de  la  Commis- 
sion   de    Liquidation    des    Etats-Unis, 


UNITED  ST-A:TES  LIQUIDATION  COMMISSION.  109 

Department,  Edwin  B.  Parker,  Chair-  Ministere  de  la  Guerre,  Edwin  B. 
man;  and  by  the  Republic  of  France,  Parker,  President;  et  par  la  Repub- 
acting  through  le  Sous-Secretaire  lique  Francaise,  agissant  par  I'inter- 
d'Etat  aux  Finances,  Paul  Morel.  mediaire  du  Sous-Secretaire  d'Etataux 

Finances,  Paul  Morel. 

United  States  of  America, 
By  E.  B.  Paekeb, 
Chairman,  United  States  Liquidation  Commission — War  Department. 

Republic  of  France. 

By  P.  Morel,  -__ 

Le  Sous-Secretaire  d'Etat  aux  Finances. 

(2)  The  Ratification  of  the  But.k  Sale  Contract. 

Republic  of  France,  Law  of  the  21st  October,  1919. 

Law  ratifying  the  agreement  entered  into  August  1,  1919,  between  the  United 
States  of  America  and  the  French  Republic  for  the  sale  of  American  stocks. 

The  Senate  and  the  Chamber  of  Deputies  have  adopted, 

The  President  of  the  Republic  promulgates  the  law,  whereof  the  terms 
follow : 

Sole  Article :  The  agreement  entered  into  August  1,  1919,  between  the  United 
States  of  America  and  the  Republic  of  France  for  the  purchase  by  France  of 
the  surplus  property  imported,  purchased,  or  constructed  in  France  since  April 
6,  1917,  by  the  War  Department  of  the  United  States  of  America,  is  hereby 
voted. 

The  present  law  considered  and  adopted  by  the  Senate  and  by  the  Chamber 
of  Deputies  shall  be  executed  as  a  law  of  the  State. 

Done  at  Paris,  21  October,  1919 : 

By  the  President  of  the  Republic : 

The  President  of  the  Council,  Minister  of  War, 

Georges  Clemenceau. 

The  Minister  of  Finance : 

L.  L.  Klotz. 

Note. — A  further  law  provides  for  a  separate  accounting  in  disposing  of  these 
stocks;  and  after  the  deduction  of  direct  expenses,  a  turning  of  the  proceeds 
into  a  special  fund  for  the  payment  of  principal  and  interest  on  the  purchase 
debt. 

(3)  Letter  of  Transmittal  of  Contract,  Parker  to  Morel,  August  4,  1919. 

Subject :  Sale  of  property  by  the  United  States  War  Department  to  the  Govern- 
ment of  France. 

M.  Paul  Morel, 

Le  Sous- Secretaire  d'Etat  aux  Finances,  Paris,  France. 
My  Dear  Monsieur  Morel  :  Complying  with  my  promise  to  you  made  in  con- 
ference had  in  your  office  Friday  afternoon,  August  1,  I  now  have  pleasure  in 
handing  you  herewith  draft  of  contract  to  be  entered  into  between  the  United 
States  of  America  on  the  one  part,  and  the  Republic  of  France  on  the  other  part. 


110  UNITED  STATES  LIQUIDATION  COMMISSION. 

for  the  sale  of  property  by  the  War  Department  of  the  United  States  to  the 
Government  of  France. 

You  will  note  that  the  contract  follows  very  closely  the  language  of  your 
memorandum,  which  I  received  on  August  1,  and  which  was  in  response  to  my 
letter  of  July  25.  There  are  a  few  provisions,  such  as  that  dealing  with 
"Waiver  of  claims,"  constituting  subdivision  "c"  of  Article  Three,  not  em- 
bodied in  your  memorandum,  but  which  you  will  find  covered  in  the  corre- 
spondence leading  up  to  this  agreement  and  which  I  am  sure  are  clearly  under- 
stood between  us. 

We  both  agree  that  it  is  desirable  to  keep  this  formal  contract  as  simple  as 
practicable  and  not  encumber  it  with  details,  and  to  that  end  I  am  not  under- 
taking to  embody  in  the  contract  the  following: 

1.  The  estimated  selling  value  of  the  undelivered  material,  equipment,  and 
supplies  which  America  has  sold  or  contracted  to  sell,  aggregating  approxi- 
mately $77,265,297.83,  is  estimated  to  approximate  75  per  cent  of  the  cost  price 
as  stated  on  the  American  inventories,  and  these  materials,  equipment,  and  sup- 
plies, based  on  such  values,  are  distributed  between  the  several  inventoried 
categories,  substantially  as  follows: 

Category  1 $20,  207,  704.  75 

.  Category  2 i 35,  402, 769.  36 

Category  4 1,  742,  860.  00 

Category  7 2, 113,  750.  00 

Category  8 9,  722,  763.  72 

Category  9 s 4,  637,  500.  00 

Category  12 285,  000.  00 

Category  13 3, 153,  250.  00 

Total 77,  265,  597.  83 

2.  It  is,  of  course,  understood  that  upon  the  taking  over  of  installations 
France  will  grant,  rent  free,  to  America  or  purchasers  from  it  the  temporary 
use  for  a  reasonable  time  of  such  installations  as  may  be  necessary  for  ware- 
house and  storage  space  for  material,  equipment,  and  supplies  reserved  from 
the  sale  to  France  and  mentioned  in  Article  Two  of  the  agreement  dated  August 
1,  1919.    If  you  desire  to  set  a  time  limit  on  such  use,  I  suggest  October  1,  1919. 

3.  We  will,  of  course,  keep  accurate  account  of  all  deliveries  made  on  unful- 
filled contracts  on  and  after  July  25,  the  date  on  which  I  sent  you  statement 
of  estimated  selling  value  of  undelivered  material.  Conversely,  should  we 
import  into  France  any  material,  equipment,  or  supplies  on  or  after  that  date, 
they  will  not  be  included  in  the  bulk  sale  to  France. 

4.  In  the  settlement  between  our  two  Governments  for  artillery  and  ammuni- 
tion purchased  by  America  from  France  an  agreement  has  been  reached  by 
which  America  obligates  itself  to  pay  France  a  very  large  sum.  A  considerable 
number  of  these  artillery  units  are  only  now  being  delivered,  and  some  of  them 
are  yet  to  be  finished  and  delivered.    We  are  anxious  to  take  delivery  and  return 

'  these  ordnance  supplies  and  equipment  to  the  United  States  at  the  earliest  possi- 
ble moment.  It  is,  of  course,  understood  that  these  artillery  units  which  France 
is  selling  to  America  are  not  included  in  the.  bulk  sale  to  the  French  or  in  the 
material,  equipment,  and  supplies  reserved  for  return  by  America  to  the  United 
States  estimated  in  the  contract  at  $15,000,000.  I  simply  mention  this  here  out 
of  abundance  of  caution  to  avoid  any  possible  misunderstanding  in  the  future. 

5.  You  may  treat  this  letter  as  supplementary  to  and  explanatory  of  the 
formal  agreement,  and  upon  its  acceptance  by  you  it  will  bind  both  parties 
thereto. 


UNITED  STATES  LIQUIDATION   COMMISSION.  Ill 

I  presume  it  is  desirable  that  the  contract  should  be  written  in  both  French 
and  English  in  parallel  columns,  and  if  this  is  agreeable  to  you  I  will  have  it 
prepared  accordingly. 

I  am  sure  that  you  will  agree  with  me  that  it  is  desirable  that  the  contract 
should  be  promptly  executed,  and  to  that  end  I  hold  myself  in  readiness  to 
meet  with  you  at  any  time  to-day  or  to-morrow. 
Yours  very  sincerely, 

(Signed)  Edwin  B.  Pabker, 

Chairman,  United  States  Liquidation  Commission — War  Department. 

(4)  Supplement  to  letter  of  Transmittal,  August  11,  1919. 

Subject:  Sale  of  property  by  the  United  States  War  Department  to  the  Govern- 
ment of  France. 

M.  Paul  Morel, 

Le  Sous-Secretaire  d'Etat  aux  Finances,  Paris,  France. 

My  Dear  Monsieur  Morel  :  In  the  conference  had  with  you  on  the  afternoon 
of  August  7  you  stated  that  the  terms  set  forth  in  my  letter  to  you  of  August  4, 
supplementary  to  and  explanatory  of  the  formal  agreement,  bearing  date  of 
August  1,  1919,  were  acceptable  to  you  with  the  following  changes : 

(a)  At  the  end  of  and  as  a  part  of  paragraph  (1),  page  2,  there  should  be 
added  the  following: 

"  The  material,  equipment,  and  supplies  necessary  to  complete  the  contracts  of 
sale  mentioned  shall  be  for  each  category  selected  as  follows :  If  the  materials 
are  classified  according  to  condition  as  new,  good,  worn,  much  worn,  etc.,  the 
selection  will  be  made  for  each  category,  and  for  each  class  In  that  category, 
in  the  proportion  in  which  the  various  classes  enter  into  the  category.  If  the 
materials  of  a  category  are  not  classified,  the  selection  shall  be  an  average  of 
the  qualities  in  such  category." 

(&)  At  the  end  of  paragraph  3  change  the  period  to  a  semicolon,  and  add 
the  words: 

"  Provided  America  will  not  import  into  France  any  surplus  War  Department 
material,  equipment,  or  supplies  for  sale  in  France,  without  first  giving  to 
France  an  opportunity  to  purchase  same." 

Will  you  please  treat  this  letter  as  supplementary  to  my  letter  to  you  of 
August  4,  above  mentioned? 
Yours  very  sincerely, 

(Signed)  Edwin  B.  Parker, 

Chairman,  United  States  Liquidation  Commission — War  Department. 


APPENDIX  XL 

1.  Letter  from  Mr.  Hoover  to  Judge  Parker. 

Supreme  Economic  Council,  Food  Section, 

March  17,  1919. 
Chairman  United  States  Liquidation  Commission — War  Department, 

Paris,  France. 
Dear  Judge  Parker  :  The  clothing  relief  to  the  liberated  countries  of  Europe 
is  just'  as  important  as  food  relief,  and  we  have  already  made  considerable  pur- 
chases from  the  Army  for  Belgium  and  northern  France,  and  have  even  bought 
and  shipped  from  the  United  States.    The  prices,  however,  on  the  Army  mate- 


112  UNITED  STATES  LIQUIDATION  COMMISSION. 

rials  have  been  extremely  high — higher  than  from  the  trade — and  would  only 
be  accepted  under  force  majeure.  The  Governments  who  buy  them  necessarily 
have  to  re-sell  to  their  public  and  they  are  very  wary  as  to  buying  in  considera- 
able  amounts  at  the  present  prices,  as  private  firms,  which  are  rapidly  re-open- 
ing, are  able  to  place  similar  goods  at  lower  prices.  If,  on  the  other  hand,  rea- 
sonable prices  can  be  made  and  credits  giyen,  we  can  go  a  long  ways  toward 
relieving  the  Army  of  its  clothing  and  we  could  also  relieve  it  of  a  large  amount 
of  iron  rations.  The  Army  have  a  number  of  "  Lake  "  boats,  frpm  2,000  to  3,000 
tons  carrying  capacity,  at  present  in  the  coal  trade,  which  they  are  now  ready 
to  relinquish  to  return  to  the  States.  If  they  would  undertake  to  load  a  cargo 
of  these  boats  with  clothing  supplies  at  reasonable  prices  for  each,  Roumania, 
Greater  Serbia,  Poland,  and  a  further  cargo  of  iron  rations  for  Poland,  we 
could  dispose  of  this  material  for  you  at  once.  We  have  a  general  contractoral 
arrangement  with  these  Governments  by  which  they  accept  our  invoices  for  such 
cargoes,  provided  we  are  willing  to  say  that  they  are  reasonable  prices,  and 
will  undertake  to  give  any  sort  of  obligation  that  we  may  call  for.  None  of 
these  Governments,  of  course,  have  any  money,  and  if  the  Army  will  take  a  12- 
month's  treasury  bill  in  each  case  the  whole  matter  could  be  put  in  hand  and 
carried  through  instantly,  provided  always  that  the  prices  are  reasonable.  I 
understand  that  the  treasury  prefers  to  make  advances  to  these  countries  with 
which  they  are  to  pay  for  these  materials.  This  is,  however,  only  a  question 
of  inversion  of  finance,  but  I  mention  it  as  I  understand  it  is  their  desire. 
Yours  faithfully, 

Herbert  Hoover. 


2.  Letter  from  the  President  to  Judge  Parker. 

The  President  of  the  United  States  of  America, 

Paris,  2^  March,  1919. 

My  Dear  Judge  Parker  :  Mr.  Hoover  has  represented  to  me  the  critical  cloth- 
ing conditions  in  the  liberated  countries.  He  has  also  presented  to  me  the  fact 
that  the  War  Department  is  possessed  of  enormous  stocks,  not  only  of  new 
clothing  but  of  renovated  materials.  It  must  be  obvious  that  these  renovated 
materials  can  have  but  little  value  in  the  world  markets  and  that  the  unused 
materials,  purchased  and  manufactured  under  war  conditions,  will  soon  be 
heavily  depreciated  by  the  return  of  commerce  to  more  normal  prices.  ,  It 
would  appear,  therefore,  that  it  is  desirable  to  liquidate  these  stocks  at  the 
earliest  possible  moment. 

It  would  appear  that  but  little  market  could  be  found  for  such  large  quan- 
tities of  clothing  and  shoes  and  similar  articles,  except  through  some  such  relief 
agency  as  that  conducted  by  Mr.  Hoover  and,  to  some  extent,  this  agency  may 
be  of  value  in  the  distribution  of  the  unused  material.  The  sympathetic  interest 
which  the  American  people  must  have  in  the  alleviation  of  misery  amongst  the 
liberated  people  should  lead  us  to  entertain  the  most  sympathetic  view  as  to 
prices  and  terms  upon  which  this  material  is  disposed  of  to  them.  I  would  be 
glad,  therefore,  if  the  Commission  could  accept  as  its  guiding  principle  in  these 
negotiations  the  fact  that  it  is  not  only  securing  a  rapid  liquidation  of  materials 
that  may  otherwise  prove  practically  unsalable,  but  also  that  it  has  an  oppor- 
tunity to  perform  a  fine  human  service  by  approaching  the  matter  in  the  most 
sympathetic  mind,  and  I  would  be  glad  if  the  Commission  could  see  its  way  to 
very  largely  accept  Mr.  Hoover's  views  as  to  the  terms  upon  which  dealings 
should  be  undertaken  with  the  liberated  peoples. 

Faithfully  yours,  Woodrow  Wilson. 


UNITED  STATES  LIQUIDATION   COMMISSION. 
3.  Letter  from  Judge  Parker  to  the  President. 


113 


Paris,  March  25,  1919. 
My  Dear  Mr.  President  :  It  will  be  the  pleasure  as  well  as  the  duty  of  this 
Commission  to  pursue  the  course  outlined  in  your  letter  of  March  24  addressed 
to  me,  in  disposing,  with  Mr.  Hoover's  assistance,  of  salvaged  wearing  apparel 
and  other  materials  and  supplies  of  which  the  liberated  countries  are  sorely 
in  need. 

Yours  respectfully,  Edwin  B.  Parker,  Chairman. 

The  President, 

12,  Place  des  Etats  Unis,  Paris,  France. 


APPENDIX  XII. 

The  Liberated  Nations  and  Their  Commercial  Organizations. 

Poland — Polish  Relief  and  Supply  Corporation. 

Czechoslovakia — Czechoslovakia  Relief  Corporation. 

Roumania — The  Government. 

Kingdom  of  Serbs,  Croats,  and  Slovenes — The  Government. 

Esthonia — Revalis. 

Ukrainia — Ukrailian. 

Latvia — Central  Union  Consums. 

Lithuania — Vilnis. 


APPENDIX  XIII. 

United  States  Liquidation  Commission — W.  D., 

Office  of  General  Sales  Agent, 

Washington,  D.  C,  May  27, 1920. 

Memorandum  to  U.  S.  Liquidation  Commission — W.  D. 

1.  The  following  statement  shows  status  of  sales  of  animals  in  A.  E.  F. : 


Purchaser. 


Quantity. 


Total. 


French  individuals 

German  individuals 

Bavarian  Syndicate 

Czechoslovakia 

Polish  Relief  and  Supply  Corporation 

French  Government 

Belgian  Government 

Grand  total 


69,769 

$13,903,346.41 

33,717 

7,243,983.77 

13,039 

2,293,300.43 

10 

3,870.10 

.5,900 

1,662,000.00 

58,984 

10,928,714.85 

490 

97,849.46 

181,909 

35,133,065.02 

E.  P.  Orton, 
Major,  Cavalry,  General  Sales  Anient. 


183176— 2( 


114 


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118  UNITED  STATES  LIQUIDATION-  COMMISSION. 

APPENDIX  XV. 

Contract  fob  Liquidation  of  Claims  Between  United  States  of  America  and 
THE  Government  of  the  Kingdom  of  Belgium. 

This  contract  entered  into  this  seventh  day  of  November,  one  thousand  nine 
hundred  and  nineteen,  by  and  betvs^een  the  United  States  of  America  (herein- 
after called  the  United  States),  acting  through  the  United  States  Liquidation 
Commission — War  Department,  of  the  first  part,  and  the  Government  of  the 
Kingdom  of  Belgium  (hereinafter  called  Belgium),  acting  through  the  minister 
of  finance,  of  the  second  part  WITNESSETH : 

That  whereas  Belgium  has  furnished  the  armed  forces  of  the  United  States 
with  rail  and  water  transport,  the  use  of  locomotives,  railway  material,  and 
other  merchandise  and  services  for  the  use  of  the  American  forces  in  Europe; 

And  whereas  the  private  railroad  companies  in  Belgium  have  furnished 
certain  railroad  transportation  to  the  armed  forces  of  the  United  States,  which 
all  parties  desire  to  include  in  this  settlement ; 

And  whereas  the  Belgian  railroads  have  presented  certain  ordres  de  transport 
signed  by  American  officers  which  the  United  States  believes  should  be  paid  by 
Great  Britain  under  a  capitation  agreement  concerning  American  troops  serving 
with  the  British  Armies ; 

And  whereas  the  Belgian  railroads  have  received  from  the  French  railroads 
certain  bills  for  supplies  furnished  to  Belgian  locomotives  rented  to  the  Ameri- 
can forces,  which  charges  the  United  States  believes  are  not  properly  payable 
by  Belgium ; 

And  whereas  the  amount  of  the  indebtedness  of  the  United  States  to  Belgium 
by  reason  of  the  materials  and  services  referred  to  in  the  foregoing  paragraphs 
is  difficult  of  exact  determination  on  account  of  war  conditions  ; 

And  whereas  the  United  States  has  sold  to  Belgium  certain  merchandise  and 
has  performed  for  Belgium  certain  services  aggregating  approximately  thirty 
million  dollars  (30,000,000.00  dollars)  ; 

And  whereas  by  a  contract  dated  March  first,  A.  D.  one  thousand  nine  hun- 
dred and  nineteen,  Belgium  agreed  to  give  and  the  United  States  agreed  to 
accept  in  payment  for  purchases  to  the  aggregate  amount  of  twenty-four 
milUon  dollars  ($24,000,000.00)  treasury  bills  of  the  Belgian  Government, 
payable  not  later  than  April  tenth,  A.  D.  one  thousand  nine  hundred  and  twenty- 
two,  and  secured  by  a  first  lien  on  the  portion  of  the  German  war  indemnity 
payable  to  Belgium,  as  more  particularly  stated  in  said  agreement; 

And  whereas  by  a  certain  other  agreement  dated  August  fifth,  A.  D.  one 
thousand  nine  hundred  and  nineteen,  Belgium  agreed  to  give  and  the  United 
States  agreed  to  accept  in  payment  for  sales  of  subsistence  stores,  which  sales 
aggregate  eight  million  three  hundred  and  ninety-two  thousand  ninety-seven 
dollars  fifty-seven  cents  ($8,392,097.57)  notes  of  the  Belgian  Government  payable 
on  or  before  August  fifth,  A.  D.  one  thousand  nine  hundred  and  twenty-two,  as 
more  particularly  stated  in  said  agreement ; 

And  whereas  by  a  certain  other  agreement  dated  August  twenty-first.  A,  D. 
one  thousand  nine  hundred  and  nineteen,  Belgium  agreed  to  give  and  the  United 
States  agreed  to  accept  in  payment  for  sales  of  office  fittings  at  Antwerp,  which 
sales  aggregate  one  hundred  and  ninety-six  thousand  four  hundred  and  eighty- 
three  dollars  fifty-seven  cents  ($196,483.57),  notes  of  the  Belgian  Government 
payable  on  or  before  August  twenty-first,  A.  D.  one  thousand  nine  hundred  and 
twenty-two,  as  more  particularly  stated  in  said  agreement; 

And  whereas  all  parties  hereto  desire  to  adjust  any  and  all  claims  and  de- 
mands of  every  kind,  nature,  and  description  existing  between  them  up  to  and 


UNITED  STATES  LIQUIDATION  COMMISSION.  119 

including  the  thirty-first  day  of  October,  A.  D.  one  thousand  nine  hundred  and 
nineteen : 

Now  therefore,  in  consideration  of  the  premises  and  the  other  considerations 
herein  stated,  it  is  agreed  as  follows : 

Abticle  One.  Belgium  agrees  to  deliver  forthwith  to  the  financial  requisition 
officer,  Paris,  or  to  such  other  officer  as  shall  be  fully  designated  to  receive  the 
same,  treasury  bills  or  notes  to  the  amount  of  eighteen  million  five  hundred  and 
seventy-four  thousand  one  hundred  and  thirty-nine  dollars  seventy-nine  cents 
($18,574,139.79),  as  provided  in  said  agreement  of  March  first,  A.  D.  one  thou- 
sand nine  hundred  and  nineteen,  and  further  treasury  bills  or  notes  to  the 
amount  of  eight  million  three  hundred  and  ninety-two  thousand  ninety-seven 
dollars  fifty-seven  cents  ($8,392,097.57),  as  provided  in  said  agreementrof 
August  fifth,  A.  D.  one  thousand  nine  hundred  and  nineteen,  and  further  treas- 
ury bills  or  notes  to  the  amount  of  one  hundred  and  ninety-six  thousand  four 
hundred  and  eighty-three  dollars  fifty-seven  cents  ($196,483.57),  as  provided  in 
said  agreement  of  August  twenty-first,  A.  D.  one  thousand  nine  hundred  and 
nineteen.  All  of  said  obligations  shall  be  in  form  satisfactory  to  the  Treasurer 
of  the  United  States  and  in  accordance  with  the  provisions  of  the  several  agree- 
ments above  referred  to,  provided  nevertheless  that  for  convenience  the  parties 
shall  be  at  liberty  to  make  such  changes  in  the  form  of  said  obligations  in- 
cluding dates  for  payment  of  principal  and  interest  as  may  be  mutually  agreed 
upon,  and  including  such  adjustments  as  are  necessary  to  arrive  at  round  sums 
for  the  amounts  of  said  obligations. 

Aeticle  Two.  In  addition  to  the  foregoing  payments  Belgium  releases  the 
United  States  from  any  and  all  debts,  claims,  and  liabilities  whether  in  con- 
tract or  tort  which  Belgium  now  has  or  may  have  by  reason  of  any  act  done 
or  engagement  entered  into  on  or  before  the  thirty-first  day  of  October,  A.  D. 
one  thousand  nine  hundred  and  nineteen,  for  materials  or  services  furnished 
to  or  damage  done  by  the  American  forces  in  Europe  except  as  hereafter  stated. 
In  this  release  are  included  all  claims  for  transportation  furnished  to  the 
American  Red  Cross,  the  American  Young  Men's  Christian  Association,  the 
American  Young  Women's  Christian  Association,  the  Knights  of  Columbus,  the 
Jewish  Welfare  Board,  and  the  American  Salvation  Army. 

Aeticle  Theee.  The  United  States  hereby  accepts  the  foregoing  obligations 
and  release  as  full  payment  for  all  indebtedness  existing  between  Belgium  and 
the  American  forces  in  Europe,  and  hereby  releases  Belgium  from  any  and  all 
debts,  claims,  and  liabilities,  whether  in  contract  Or  tort,  which  the  United 
States  now  has  or  may  have  by  reason  of  any  act  done  or  engagement  entered 
into  on  or  before  the  thirty-first  day  of  October,  A.  D.  one  thousand  nine  hun- 
dred and  nineteen,  for  materials  and  services  furnished  by  or  damage  done  to 
the  American  forces  in  Europe  except  as  hereinafter  stated. 

Aeticle  Foue.  It  is  expressly  understood  that  the  releases  contained  in 
Articles  Two  and  Three  above  do  not  apply  to  contracts  and  other  obligations 
entered  into,  or  incurred  in  the  United  States,  including  an  advance  of  money 
by  the  Belgian  Government  to  the  credit  of  Lieutenant  James  Pede,  Quarter- 
master Corps,  on  or  about  July  four,  one  thousand  nine  hundred  and  nineteen, 
but  cover  only  transactions  between  the  parties  hereto  entered  into  or  occurring 
in  Europe,  including  all  claims  for  the  cargoes  of  the  steamships  Auburn  and 
Aledo.  Neither  party  hereto  will  present  or  prosecute  any  claim  against  the 
other  for  any  such  transaction  occurring  on  or  before  October  thirty-first,  one 
thousand  nine  hundred  and  nineteen,  except  as  hereinafter  provided. 

Aeticle  Five.  From  the  releases  contained  in  Articles  Two  and  Three  above 
are  hereby  excepted  the  following  obligations  arising  out  of  transactions  prio* 
to  October  thirty-first,  A.  D.  one  thousand  nine  hundred  and  nineteen. 


120  UNITED  STATES  LIQUIDATION   COMMISSION. 

A.  The  obligation  of  the  Belgian  Government  to  furnish  and  pay  the  treasury 
bills  or  notes  stated  in  Article  One  hereof. 

B.  The  United  States  will  guarantee  the  payment  to  Belgium  of  the  ordres  de 
transport  signed  by  American  officers,  which  it  contends  are  properly  payable 
by  Great  Britain,  provided  nevertheless  that  the  total  amount  guaranteed  shall 
in  no  event  exceed  the  sum  of  thirty  thousand  francs  (30,000.00  frs.). 

C.  The  United  States  will  re-pay  to  Belgium  whatever  sum  it  may  be  obliged 
to  pay  the  French  railroads  for  the  supplies  furnished  to  Belgian  locomotives 
rented  to  the  American  forces,  not  exceeding  in  the  aggregate  the  sum  of 
twenty-five  thousand  francs  (frs.  25,000.00),  provided  that  a  claim  for  the  sum 
so  expended  is  presented  within  six  months  from  the  date  of  this  instrument. 

Article  Six.  For  the  considerations  above  named  Belgium  agrees  to  save 
the  United  States  harmless  from  any  and  all  claims  of  whatever  nature  against 
the  United  States  or  members  of  its  military  or  naval  forces  on  the  part  of  any 
railway  company  within  the  limits  of  the  Kingdom  of  Belgium,  whether  such 
railway  company  is  the  property  of  the  Belgian  Government  or  not;  and  also 
against  all  claims  on  the  part  of  any  person  or  corporation  furnishing  services 
to  the  American  Army  at  Antwerp  under  the  authority  of  the  Ministre  des 
Chemins  de  Fer,  Marine,  Postes  et  Telegraphes. 

Article  Seven.  Belgium  further  agrees  to  furnish  to  the  military  and  naval 
forces  of  the  United  States  during  the  term  of  three  years  from  the  date  of 
these  presents,  railway  transportation  in  Belgium  for  persons  and  property  at 
rates  not  exceeding  those  which  may  at  the  time  be  in  force  for  the  trans- 
portation of  persons  and  property  of  the  Belgian.  Army. 

Article  Eight.  Any  sums  of  money  which  may  be  payable  by  the  United 

States  to  Belgium  by  reason  of  items  B  and  C  of  Article  Five  hereof  may  at 

•the  option  of  the  United  States  be  paid  in  cash  or  by  the  cancellation  of  an 

equivalent  amount  of  principal  of  the  obligations  mentioned  in  Article  One 

hereof. 

Article  Nine.  Whereas  Belgium  contends  that  all  debts  contracted  by  her 
up  to  November  eleventh,  A.  D.  one  thousand  nine  hundred  and  eighteen,  are 
on  the  same  footing  as  loans,  as  far  as  concerns  the  application  of  article  two 
hundred  and  thirty-two  of  the  treaty  of  peace  between  the  Allied  and  Asso- 
ciated Powers  and  Germany  concluded  at  Versailles,  and  of  a  letter  of  six- 
teenth June,  A.  D.  one  thousand  nine  hundred  and  nineteen,  from  Messrs. 
Clemenceau,  Woodrow  Wilson,  and  Lloyd-George  to  M.  Hymans,  minister  of 
foreign  affairs  of  Belgium. 

It  is  understood  and  agreed  that  the  total  debts  of  Belgium  contracted  for 
services  and  materials  furnished  up  to  November  eleventh,  A.  D.  one  thousand 
nine  hundred  and  eighteen,  which  are  included  in  this  settlement  amount  to 
four  million  five  hundred  and  seventy-five  thousand  one  hundred  and  thirty- 
three  francs  fifty  centimes  (frs.  4,575,133.50)  and  that  nothing  herein  contained 
shall  prejudice  any  action  that  the  Government  of  the  United  States  may  take 
under  or  by  virtue  of  said  treaty  and  letter. 

In  witness  whereof  on  the  day  and  year  first  above  written  this  instrument 
has  been  executed  in  four  duplicate  originals  by  the  United  States  of  America 
through  the  chairman  of  the  United  States  Liquidation  Commission — War  De- 
partment, and  by  the  Government  of  the  Kingdom  of  Belgium  through  the 
minister  of  finance. 

(Signed)  Leon  Delacy, 

Ministre  des  Finances. 
Edwin  B.  Parker, 
Chairman,  United  States  Liquidation  Commission — War  Department. 

Signed  by  both  parties  in  presence  of  Frederic  Gilbert  Bauer,  Lieut.  Col.,  J.  A. 


UNITED  STATES  LIQUIDATION   COMMISSION. 


121 


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122  UNITED  STATES  LIQUIDATION  COMMISSION. 

The  balance  due  the  U.  S.  is $27,  094, 195. 22 

And  francs  373,465.42  at  5.45  as  per  bill  of  sale 68,  525.  71 

Total 27, 162,  720.  93 

For  which  Belgium  in  final  contract  of  November  7,  1919,  fur- 
nishes treasury  bills  or  notes — 

Applying  on  sales  contract  of  Mar.  1,  1919 18,  574, 139.  79 

Applying  on  sales  contract  of  Aug.  5,  1919 8,  392,  097.  57 

Applying  on  sales  contract  of  Aug.  21,  1919 196,  483.  57 

27, 162,  720.  93 
An  item  of  £1,160.00  for  transportation  of  Belgian  personnel  from  England 
to  France  on  American  vessels  is  not  included  hereon.  The  Belgians  have 
accepted  this  account  and  order  for  its  payment  by  draft  on  London  in  pounds 
sterling  has  been  issued,  but  through  delay  on  part  of  Belgian  treasury  de- 
partment draft  has  not  yet  been  delivered.  It  will  be  delivered  in  Brussels 
this  week.     [Delivered.     See  cable  1337,  Noble  to  Parker,  par.  3.] 

The  undersigned  have  examined  the  foregoing  account  on  the  part  of  the 
U.  S.  Liquidation  Commission — War  Department  and  the  Government  of  the 
Kingdom  of  Belgium  and  find  same  to  be  correct  both  as  to  debits  and  credits. 
For  the  U.  S.  Liquidation  Commission — War  Department: 

(Signed)  Fredeeic  Gilbert  Bauer, 

Lieut.  Col.,  Chief  Finance  Officer. 
For  the  Government  of  the  Kingdom  of  Belgium : 

(Signed)  N.  Warn  ant,  Capitaine. 


APPENDIX  XVI. 

(1)  Contract  Between  United  States  of  America  and  Owen  Clegg,  James 
Todd,  Lt.  Col.  George  W.  Parkinson,  Arthur  Huntley  Walker,  Socii;T6 
Anonyme  Darracq,  a.  Darracq  &  Company  (1905)  Ltd.,  Clement  Talbot, 
Ltd.,  October  1, 1919. 

This  contract  entered  into  this  first  day  of  October,  A.  D.  1919,  by  and  be- 
tween the  United  States  of  America  (hereinafter  called  America),  acting 
through  the  United  States  Liquidation  Commission — War  Department,  of  the 
one  part,  and  Owen  Clegg,  James  Todd,  Lt.  Col.  George  W.  Parkinson,  Arthur 
Huntley  Walker,  Soci4t6  Anonyme  Darracq,  a  corporation  organized  under  the 
laws  of  France;  A.  Darracq  &  Company  (1905)  Ltd.,  a  corporation  organized 
under  the  laws  of  Great  Britain,  and  Clement  Talbot,  Ltd.,  a  corporation  or- 
ganized under  the  laws  of  Great  Britain  (hereinafter  called  the  purchasers),  of 
the  other  part,  witnesseth : 

That  for  the  consideration  hereinafter  mentioned,  th^  parties  agree  as  fol- 
lows: 

Article  One.  Property  and  supplies  sold. — America  agrees  to  and  does 
hereby  sell  to  the  purchasers  without  warranty  of  quantity,  quality  or  condi- 
tion, and  the  purchasers  agree  to  and  do  hereby  purchase  from  America  all  of 
the  surplus  motor  vehicles,  motor  property,  immobile  equipment,  spare  parts, 
supplies,  oils,  gasoline,  kerosene,  grease,  carbide,  drums,  bidons,  etc.,  of  the 
American  Forces  in  Germany  substantially  as  listed  on  a  schedule  hereto  at- 
tached as  part  hereof,  the  same  consisting  of  an  index  summary  and  sheets 
numbered  from  1  to  15  inclusive,  marked  "  Exhibit  A  "  hereto  attached  as  part 
hereof  (except  the  property  described  in  subdivisions  6  and  c  of  Article  Four 


UNITED  STATES  LIQUIDATION   COMMISSION.  123 

hereof),  together  with  all  of  the  motor  transport  equipment  located  in  Motor 
Reception  Park  No.  1  at  Sinzig,  Germany,  in  Motor  Reception  Park  No.  3  at 
Coblenz-Neuendorf  and  Coblenz-Lutzel,  Germany,  and  m  Motor  Reception  Park 
No.  4  at  Bitburg,  Germany,  whether  the  same  is  or  is  not  listed  on  Exhibit  A, 
and  America  will  not,  without  the  purchasers'  consent,  increase  or  decrease  the 
amount  of  motor  transport  equipment  contained  in  said  motor  reception  parks 
on  September  19,  1919. 

Article  Two.  Title. — Title  to  the  supplies  and  property  hereby  sold  shall  pass 
to  the  purchasers  upon  the  signing  of  this  agreement. 

Article  Three.  Purchase  price  and  terms  of  payment. — The  purchase  price 
shall    be    three    million    two    hundred    and    fifty    thousand    pounds    st«rling_ 
(£3,250,000),  payable  in  the  following  installments  on  the  following  dates: 

October  1,  1919.  Twenty  thousand  pounds £20,  000 

October  11,  1919.  One  hundred  thousand  pounds 100,000 

November  1,  1919.  Two  hundred  five  thousand  pounds 205,  000 

December  1,  1919.  Two  hundred  fifty  thousand  pounds 250,  000 

January  1,  1920.  Six  hundred  sixty-eight  thousand  seven  hundred 

fifty  pounds 668,  750 

February  1,  1920.  Six  hundred  sixty-eight  thousand  seven  hundred 

fifty  pounds 668,  750 

March  1,  1920.  Six  hundred  sixty-eight  thousand  seven  hundred  fifty 

pounds 668,  750 

April  1,  1920.  Six  hundred  sixty-eight  thousand  seven  hundred  fifty 

pounds 668,  750 

3,  2.50,  000 

The  first  payment  of  twenty  thousand  pounds  (£20,000)  has  been  made  and 
America  acknowledges  the  receipt  thereof.  All  payments  after  the  first  pay- 
ment of  twenty  thousand  pounds  (£20,000)  shall  be  made  to  the  chief  quarter- 
master of  the  American  forces  in  Germany,  now  stationed  at  Coblenz,  through 
the  general  sales  agent,  American  forces  in  Germany,  or,  at  the  election  of  the 
War  Department  of  America,  at  such  bank  or  trust  company  in  London,  Eng- 
land, or  Paris,  France,  as  the  said  War  Department  may  designate. 

Article  Four.  Shortages  or  excesses  of  property  or  supplies  sold. — A  check 
shall  be  made  by  the  representatives  of  the  parties  before  November  7th,  1919, 
of  the  property  and  supplies  hereby  sold. 

In  the  event  that  such  check  should  disclose  that  there  are  substantially 
lesser  or  greater  quantities  of  any  of  the  property  and  materials  sold  than 
the  quantities  thereof  listed  in  Exhibit  A,  the  "prices"  of  the  property  or 
materials  short  and  of  the  property  and  materials  in  e:j:cess  shall  be  deter- 
mined in  the  following  manner,  and  the  net  difference  between  the  total 
"  prices  "  of  all  of  the  property  or  material  short  and  the  total  "  prices "  of 
all  of  the  property  or  materials  in  excess  shall  be  deducted  from  the  purchase 
price  provided  in  Article  Three,  if  such  net  difference  discloses  a  net  shortage 
and  shall  be  added  thereto  if  such  net  difference  shows  a  net  excess. 

(a)  The  "prices"  of  the  property  or  materials  described  in  Exhibit  A,  and 
of  similar  property  and  materials,  are  agreed  to  be  (but  solely  for  the  purposes 
of  this  article  and  for  the  purposes  of  subdivision  (d)  of  Article  Five  hereof) 
the  following: 

Of  the  motor  vehicles  and  equipment  listed  at  pages  1  to  12,  inclusive,  of 
Exhibit  A  the  "price"  of  each  unit  is  35^  per  centum  of  the  unit  resulting 
value  thereof,  as  set  forth  in  Exhibit  A,  ascertained  as  to  each  article  by 
dividing  the  "  resulting  value "  of  such  articles  by  the  number  thereof,  as 
shown  on  said  pages  of  said  Exhibit  A.     Provided,  however,  that  the  value 


124  UNITED  STATES  LIQUIDATION   COMMISSION. 

of  the  E  and  F  class  vehicles  referred  to  in  subdivision  (h)  of  this  Article 
shall  be  ascertained  and  credited  as  provided  in  said  subdivision. 

Of  the  gasoline,  oil,  etc.,  listed  on  page  15  of  Exhibit  A,  the  "  price  "  of  each 
unit  is  the  unit  cost  thereof  as  set  forth  on  said  page  of  said  Exhibit  A. 

Of  the  immobile  equipment  and  hand  tools  in  M.  T.  C.  Overhaul  Park, 
Coblenz,  Germany,  and  of  the  spare  parts  in  spare  parts  depot,  Coblenz,  Gerr 
many,  listed  on  pages  13  and  14  of  said  Exhibit  A,  the  "  price  "  of  each  unit 
is  the  unit  resulting  value  thereof  ascertained  as  hereinbefore  provided,  from 
inventories  which  the  general  sales  agent,  American  forces  in  Germany,  has 
on  hand  and  will  submit  to  the  purchasers. 

Of  the  solid  tires,  casings,  tubes,  rims,  and  tire  carriers  in  spare-parts 
depot,  Coblenz,  Germany,  listed  on  page  14  of  Exhibit  A,  the  "  price  "  of  each 
unit  is  the  unit  resulting  value  thereof,  ascertained  as  hereinbefore  provided, 
from  the  "  resulting  values "  and  "  numbers "  set  forth  on  said  page  14  of 
Exhibit  A. 

{h)  There  are  excepted  from  this  sale  such  E  and  F  class  vehicles  listed  on 
Exhibit  A  as  America  may  require  for  repair  of  vehicles  now  in  use  by  the 
American  forces  in  Germany,  and  shall  have  removed  from  said  motor  re- 
ception parks  before  October  5,  1919,  and  the  purchasers  shall  be  credited  on 
account  of  the  purchase  price  provided  in  Article  Three  hereof  an  amount  equal 
to  35i  per  centum  of  the  unit  resulting  value  of  said  E  and  F  vehicles  so 
excepted,  as  shown  in  said  Exhibit  A,  multiplied  by  the  number  of  units 
thereof. 

(c)  There  are  also  excepted  from  this  sale  the  seven  25-kilowatt  generator 
sets  installed  in  the  shop  at  Coblenz-Lutzel,  and  the  purchasers  shall  be 
credited  therefor  on  account  of  the  purchase  price  provided  in  Article  Three 
hereof  an  amount  equal  to  the  full  unit  resulting  value  thereof,  multiplied 
by  the  number  of  units  thereof;  but  the  purchasers  shall  have  the  right  to 
use  these  generator  sets  in  connection  with  the  operation  of  the  repair  shop 
for  such  time  as  they  desire,  but  not  bey<md  the  time  that  the  American 
forces,  in  Germany  remain  in  military  possession  of  said  repair  shops. 

(d)  The  amounts  to  be  credited  or  debited,  as  provided  in  this  article,  on 
account  of  the  purchase  price  provided  in  Article  Three,  shall  be  credited  or  deb- 
ited, as  the  case  may  be,  on  account  of  the  last  instalment  of  said  purchase  price. 

(e)  On  or  before  November  7,  1919,  the  adjustment  of  the  purchase  price 
provded  by  this  article  shall  be  made  on  behalf  of  the  purchasers  by  said 
Lt.  Col.  George  W.  Parkinson,  or  such  other  person  as  the  purchasers  shall 
designate  in  writing,  and,  on  behalf  of  America,  by  the  general  sales  agent, 
American  forces  in  Germany,  and  a  written  statement  of  the  result  of  said  ad- 
justment in  six  duplicate  originals  signed  by  them,  shall,  on  or  before  said 
date,  be  made,  and  one  copy  thereof  shall  be  annexed  to  each  copy  of  this  con- 
tract as  part  thereof,  and  shall  have  the  same  force  and  effect  as  though  the 
same  had  been  executed  by  the  parties  hereto  as  part  hereof. 

Article  Five.  Security. — As  security  for  the  performance  by  the  purchasers 
of  their  obligations  under  this  agreement  they  have  redelivered  to  America, 
which  acknowledged  the  receipt  thereof,  all  of  the  property  and  supplies  hereby 
sold  to  them,  to  have  and  to  hold  the  same  in  pledge  in  accordance  with  the 
following  terms  and  conditions  : 

(a)  America  shall  hold  said  property,  at  the  sole  risk  of  the  purchasers,  and 
after  November  1,  1919,  will  be  obligated  only  to  furnish  such  guards,  for  a 
period  of  not  exceeding  one  year  from  October  1,  1919,  as  may  be  necessary 
in  the  judgment  of  the  conmianding  general,  American  forces  in  Germany,  to 
give  military  protection  thereto.  The  expenses  of  America  for  the  use  of  the 
land  and  buildings  on  or  in  which  said  property,  after  November  1,  1919,  shall 


UNITED  STATES  LIQUIDATION   COMMISSION.  125 

be  situated,  shall  be  paid  by  the  purchasers.  If  after  November  1,  1920,  any 
of  the  property  hereby  sold  shall  remain  in  the  possession  of  America,  America 
may  remove  and  store  the  same  for,  in  the  name  of,  and  for  the  account  and 
at  the  risk  of  the  purchasers,  and  the  cost  of  said  removal  shall  be  repaid  by 
the  purchasers  to  America  and  shall  constitute  a  lien  on  said  property,  and 
the  cost  of  the  storage  thereof  shall  constitute  a  lien  thereon  in  favor  of  the 
person,  firm,  or  corporation  undertaking  the  storage  thereof. 

(b)  In  the  event  of  default  by  the  purchasers  in  the  payment  of  the  instal- 
ments of  the  purchase  price  amounting  to  three  hundred  and  five  thousand 
pounds  (£305,000)  payable  October  11th  and  November  1,  1919,  or  in  the  pay- 
ment of  the  instalment  of  the  purchase  price  amounting  to  two  hundred  and 
fifty  thousand  pounds  (£250,000)  payable  December  1,  1919,  America  may,  aftei" 
giving  ten  days'  written  notice  thereof  to  the  purchasers  in  the  manner  herein- 
after provided,  without  resort  to  judicial  proceedings  or  otherwise,  declare 
this  agreement  to  be  canceled,  and  thereupon,  this  agreement  shall  be  canceled, 
and  all  of  the  property  and  supplies  hereby  sold  by  America  to  the  purchasers 
shall  revert  to  and  become  the  absolute  property  of  America,  and  the  sums  paid 
by  the  purchasers  to  America  prior  to  such  cancellations  shall  be  retained  by 
America  as  liquidated  damages  for  breach  of  this  contract,  and  the  parties 
hereby  agree  that  said  sums,  in  said  event,  would  fairly  represent  the  amount 
of  damages  that  would  be  sustained  by  America  on  account  of  said  breach. 

(c)  In  the  event  of  the  default  by  the  purchasers  in  the  payment  of  any  of 
the  installments  of  the  purchase  price  or  in  the  payment  of  any  other  sums 
payable  by  the  purchasers  to  America  under  this  agreement,  America  may 
declare  the  entire  unpaid  balance  of  the  purchase  price,  or  any  part  thereof, 
immediately  due  and  payable,  and,  thereupon,  the  same  shall  be  due  and  pay- 
able, and  America  may,  after  giving  ten  days'  written  notice  thereof  to  the 
purchasers  in  the  manner  hereinafter  provided,  without  judicial  proceedings  of 
any  kind,  sell  at  public  or  private  sale,  in  bulk  or  in  installments,  and  from  time 
to  time,  at  such  price  or  prices  as  America,  in  her  sole  discretion  may  deem  to 
be  reasonable  under  the  circumstances,  any  or  all  of  the  property  hereby 
pledged,  and  shall  apply  the  net  proceeds  thereof  after  deducting  the  expenses 
of  sale  and  delivery,  to  the  payment  of  the  amount  due  to  America  under  this 
agreement,  and  shall  pay  over  the  balance  thereof,  if  any,  to  the  purchasers. 

If  after  any  sale  as  aforesaid  there  then  should  remain  unpaid  any  balance 
payable  under  this  agreement  by  the  purchasers  to  America,  the  purchasers 
shall,  jointly  and  severally,  be  liable  for  the  payment  thereof  to  America,  and 
if  there  then  should  remain  in  America's  possession  any  of  the  property  hereby 
pledged  the  same  shall  remain  subject  to  the  lien  of  said  pledge  and  may  be 
sold  as  hereinbefore  provided  and  the  proceeds  applied  as  hereinbefore  provided. 

(d)  After  the  payment  by  the  purchasers  of  the  installments  of  twenty  thou- 
sand pounds  (£20,000)  payable  Ocober  1,  1919,  and  of  the  two  installments  of 
one  hundred  thousand  pounds  (£100,000)  October  11th,  1919,  and  two  hundred 
five  thousand  pounds  (£205,000)  November  1st,  1919,  the  purchasers  may,  from 
time  to  time,  and  upon  paying  to  America  additional  amounts  equal  to  the 
*' prices"  thereof  ascertained  as  provided  in  subdivision  (a)  of  Article  Four 
hereof,  and  upon  giving  proper  receipts  therefor,  take  possession  of  any  of  the 
property  or  supplies  hereby  pledged ;  and  the  payments  made  as  aforesaid  shall 
be  credited  on  account  of  the  installments  of  the  purchase  price  payable  as  pro- 
vided in  Article  Three  (adjusted  as  provided  in  Article  Four  hereof)  and  there- 
upon said  property  and  supplies  so  delivered  shall  be  free  from  the  lien  of  this 
pledge. 

When  the  aggregate  amount  of  all  of  the  sums  paid  by  the  purchasers  to 
America,  under  this  agreement,  shall  equal  the  entire  amount  payable  by  the 


126  UNITED  STATES  LIQUIDATION  COMMISSION. 

purchasers  to  America  thereunder,  all  of  the  remaining  property  and  supplies 
hereby  sold  shall  be  released  from  the  lien  of  this  pledge  and  shall  be  forthwith 
delivered  to  the  purchasers. 

Aeticle  Six.  Miscellaneous  provisionst — The  purchasers  may  from  time  to 
time  repair  and  improve  motor  vehicles  and  equipment  in  the  Overhaul  Park, 
Coblenz,  Germany,  sold  under  this  agreement. 

Article  Seven.  The  obligations  of  the  purchasers  under  this  agreement  shall 
be  joint  and  several. 

Article  Eight.  This  contract  shall  be  interpreted  in  accordance  with  the  laws 
of  America  as  the  same  prevail  in  the  District  of  Columbia. 

Article  Nine.  The  purchasers  designate  their  office  in  Coblenz  or  Coblenz- 
Lutzel  as  a  place  where  America  may  deliver  any  written  notice  provided  for  by 
this  agreement  or  otherwise,  and  it  shall  also  constitute  a  delivery  of  any  such 
notice  when  the  same  has  been  deposited  in  the  German  or  French  mails, 
registered,  postage  prepaid,  in  an  envelope  addressed  to  Soci6t§  Anonyme 
Darracq,  at  33  Quai  du  General  Gallieni,  Surennes,  France. 

Article  Ten.  The  Quartermaster's  Corps  of  the  American  forces  in  Germany 
shall  sell  to  the  personnel  employed  by  the  purchasers  to  handle  the  motor 
equipment,  on  orders  signed  by  the  purchasers  or  their  authorized  representa- 
tives, commissary  food  supplies  at  the  prices  charged  therefor  to  civilian  em- 
ployees of  the  American  forces  in  Germany,  provided  said  food  supplies  are  used 
solely  for  the  subsistence  of  said  personnel  and  for  no  other  purpose. 

Article  Eleven.  America  will  not  permit  within  the  area  of  Germany  subject 
to  its  military  control  any  tax  or  duty  to  be  imposed  or  collected  by  Germany 
on  account  of  the  importation  into  Germany  of  any  of  the  property  or  supplies 
hereby  sold  or  on  account  of  the  exportation  thereof  by  the  purchasers  from 
Germany. 

Article  Twelve.  The  purchasers  will  not  sell  in  France  any  of  the  property 
purchased  without  first  procuring  the  consent  in  writing  of  M.  Paul  Morel,  le 
Sous-Secretaire  d'Etat  aux  Finances,  or  of  some  other  authorized  representative 
of  the  French  Government. 

Article  Thirteen.  The  commanding  officer  of  the  American  forces  in  Ger- 
many will  issue  such  passes  or  permits  as  may  be  necessary  for  the  personnel 
employed  by  the  purchasers  to  handle  said  motor  equipment  so  that  said  per- 
sonnel and  persons  negotiating  with  the  said  purchasers  can  enter  and  leave  the 
occupied  territory  without  hindrance  or  delay  at  all  times. 

Article  Fourteen.  So  long  as  the  American  forces  in  Germany  shall  be 
entitled  by  requisition  or  lease  to  use  the  motor  parks,  grounds,  and  group  of 
buildings  known  as  the  "  Overhaul  Park  and  Annex,  Coblenz-Lutzel,"  but  not 
longer  than  may  be  necessary  for  the  purchasers  to  repair  and  ship  the  motor 
transport  vehicles  hereby  sold,  and  in  no  event  later  than  October  1,  1920, 
unless  the  commanding  general,  American  forces,  extend  said  period,  the  pur- 
chasers may  use  said  grounds  and  buildings  for  the  purpose  of  housing  the  per- 
sonnel necessary  to  handle  said  property  or  for  other  necessary  pui-poses  con- 
nected with  the  carrying  out  of  this  agreement.  The  cost  to  America  for  the 
use  and  occupation  of  said  grounds  and  buildings,  while  used  as  aforesaid  by 
the  purchasers,  shall  be  reimbursed  to  America  by  the  purchasers.  ' 

Article  Fifteen.  Each  of  the  purchasers  severally  irrevocably  constitutes  and 
appoints  the  consul  general  and  the  vice  consul  of  Great  Britain  at  New  York 
City,  New  York,  and  their  successors,  and  each  of  them,  his  or  its  attorney  in 
fact  with  full  power  for  him  or  it  and  in  the  name,  place,  and  stead  of  him  or 
it,  to  receive  or  accept  service  of  judicial  process  in  any  action,  suit,  or  pro- 
ceeding which  America  may  bring  against  him  or  it  on  account  of  this  agree- 
ment, or  for  the  enforcement  of  the  obligations  thereof. 


UNITED  STATES  LIQUIDATION  COMMISSION.  127 

Article  Sixteen.  The  general  sales  agent,  American  forces  in  Germany,  or 
his  successor,  or  such  other  person  as  the  War  Department  of  America  may 
designate  to  the  purchasers  in  writing,  shall  be  the  representative  of  America 
through  whom  shall  be  transmitted  all  reports,  notices,  or  other  communica- 
tions relating  to  this  agreement  which  the  purchasers  may  desire  to  deliver  or 
communicate  to  America. 

In  witness  whereof,  on  the  day  and  year  first  above  written,  this  contract 
has  been  executed  in  six  parts,  each  having  the  full  force  and  effect  of  an 
original,  by  the  United  States  of  America,  acting  through  the  United  States 
Liquidation  Commission — War  Department,  Edwin  B.  Parker,  chairman,  of  the 
one  part;  and  by  Owen  Clegg;  James  Todd;  Lt.  Col.  George  W.  Parkinson; 
Arthur  Huntley  Walker ;  Soci^te  Anonyme  Darracq,  acting  through  Owen  Clegg, 
duly  authorized  thereto;  A.  Darracq  &  Company  (1905),  Ltd.,  acting  through 
A.  Huntley  Walker  and  James  Todd,  duly  authorized  thereto ;  and  by  Clement 
Talbot,  Ltd.,  acting  through  A.  Huntley  Walker,  duly  authorized  thereto,  on 
the  other  part. 

United  States  of  Ameeica, 
By  Edwin  B.  Parkeb, 
Chairman,  United  States  Liquidation  Commission — War  Department. 

Owen  Clegg. 
James  Todd. 

G.  W.  Parkinson,  Lt.  Col. 
Arthur  Huntley  Walker. 
Soci^Tfi  Anonyme  Darracq, 
By  Owen  Clegg, 

Managing  Director. 
A.  Darracq  &  Company  (1905),  Ltd., 
By  A.  Huntley  Walker,  James  Todd. 

Clement  Talbot,  Ltd., 
By  A.  Huntley  Walker. 
Witness  as  to  Edwin  B.  Parker,  Owen  Clegg,  James  Todd,  Lt.  Col.  George  W. 
Parkinson,  Arthur  Huntley  Walker. 

(Signed.)  Edward  T.  Noble. 

(2)  Contract  Between  United  States  of  America  and  Owen  Clegg  et  al., 
Dated  December  3,  1919,  Supplementary  to  Contract  Dated  October  1, 
1919. 

Contract  between  United  States  of  America  and  Owen  Clegg  et  al.,  dated 
December  3,  1919,  supplementary  to  contract  dated  October  1,  1919. 

Whereas,  heretofore,  to  wit,  on  the  1st  day  of  October,  A.  D.  1919,  a  contract 
(hereinafter  called  "Original  contract")  was  entered  into  between  the  United 
States  of  America  ( therein  and  hereinafter  designated  "  America  " )  on  the 
one  part,  and  Owen  Clegg  and  others  (therein  designated  "Purchasers"  and 
hereinafter,  together  with  The  Motor  Organizations,  Limited,  designated  "  Pur- 
chasers ")  on  the  other  part,  a  copy  of  which  said  original  contract  (omitting  the 
exhibits  thereto)  is  hereunto  attached  and  made  a  part  hereof,  marked  for 
identification  "Exhibit  A";   and 

Whereas,  the  said  The  Motor  Organizations,  Limited,  a  corporation  incorpo- 
rated and  existing  under  and  by  virtue  of  the  laws  of  Great  Britain,  of  which 
Sir  Percival  Perry,  James  Todd,  and  Col.  B.  J.  H.  Fitzgerald  are  directors, 
has  acquired  an  interest  in  and  assumed  obligations  arising  under  the  said 
original  contract;  and 

Whereas  it  has  been  found  impracticable  to  complete  the  checking  of  the 
properties  acquired  by  the  purchasers  under  the  terms  of  the  said  original  con* 


128  UlTITED  STATES  LIQUIDATION  COMMISSION. 

tract  and  make  the  adjustments  and  state  an  account  on  or  before  November  7, 
1919,  as  stipulated  for  in  Article  Four  of  the  original  contract ;  and 

Whereas  the  purchasers  have  made  the  payments  stipulated  for  in  Article 
Three  of  the  said  original  contract,  which  payments  so  made  aggregate  in 
amount  £325,000,  leaving  a  balance  due  by  the  purchasers  to  America  of 
£2,925.000  (subject  to  additions  or  deductions  in  accordance  with  the  pro- 
visions of  Article  Four  of  the  original  contract)  ;  and 

Wliereas  the  purchasers  desire  an  extension  of  time  and  a  readjustment  of 
the  dates  of  payment  of  such  balance ;  and 

Whereas  Sir  Percival  Perry  has  assumed  the  active  executive  management 
of  The  Motor  Organizations,  Limited,  and  as  such  is  in  charge  of  conditioning 
and  marketing  the  property  acquired  by  the  purchasers  under  the  terms  of  the 
said  original  contract: 

Note,  therefore,  in  consideration  of  the  premises  and  of  the  mutual  under- 
takings herein  mentioned,  it  is  agreed  between  the  parties  hereto  that  the 
original  contract  shall  be  and  it  is  hereby  modified  and  amended  in  the  follow- 
ing respects : 

Section  1.  The  Motor  Organizations,  Limited,  joins  herein  for  the  purpose 
of  assuming,  and  does  in  all  things  assume,  jointly  and  severally  with  the 
other  purchasers,  the  obligations  and  undertakings  arising  under  the  said 
original  contract  and  this  supplement  thereto,  without,  however,  in  any  wise 
or  to  any  extent  releasing  or  modifying  the  joint  and  several  obligations  of  the 
purchasers  named  in  the  said  original  contract. 

Section  2.  Sir  Percival  Perry  joins  herein  for  the  purpose  of  agreeing, 
jointly  and  severally,  with  the  other  purchasers,  and  does  hereby  agree,  jointly 
and  severally,  with  the  other  purchasers,  that  so  long  as  the  purchase  price, 
or  any  part  of  it,  remains  unpaid,  he  will  (unless  released  from  this  obligation 
by  America)  be  and  remain  the  active  and  directing  executive  in  control  of 
and  in  active  charge  of  the  conditioning  and  marketing  of  the  property 
acquired  by  the  purchasers  under  the  said  original  contract  and  any  and  all 
amendments  thereto. 

Section  3.  The  time  for  checking  the  said  property,  making  the  adjust- 
ments and  stating  the  account,  as  provided  by  Article  Four  of  the  said 
original  contract,  shall  be  extended,  and  is  hereby  extended  from  November  7, 
1919,  to  January  15,  1920.  It  is  further  agreed  between  the  parties  hereto 
that  in  making  the  said  check,  adjustments  and  statement  of  account  America 
shall  be  represented  by  Lieutenant  Colonel  T.  H.  Kruttschnitt,  and  the 
purchasers  shall  be  represented  by  Lieutenant  Colonel  G.  W.  Parkinson  (or  in 
the  event  of  his  inability  or  refusal  to  act,  then  by  Sir  Percival  Perry)  ;  and  in 
the  event  of  their  disagreement  with  respect  to  the  classification  or  quantity  of 
the  equipment  or  supplies,  or  any  other  matter  arising  in  connection  with  the 
said  checking,  adjustments,  and  the  statement  of  an  account,  as  provided  for  in 
the  said  Article  Four  of  the  said  original  contract,  then  in  such  event  the  de- 
cision of  Lieutenant  Colonel  T.  H.  Kruttschnitt  shall  be  final. 

Section  4.  The  purchasers  shall  immediately  on  the  signing  of  this  contract 
deposit  in  the  Guaranty  Trust  Co.  of  New  York  (Paris  Branch)  the  sum  of 
two  hundred  fifty  thousand  pounds  (£250,000)  in  the  name  of  Lieutenant 
Colonel  T.  H.  Kruttschnitt,  A.  M.  C,  trustee,  and  the  purchasers  may  draw 
upon  said  amount  by  checks  countersigned  by  said  trustee  to  defray  the  ex- 
penses of  repairing,  improving,  and  selling  the  property  purchased  under  this 
contract;  provided  that  at  any  time  Lieutenant  Colonel  T.  H.  Kruttschnitt 
may  require  the  purchasers  to  reinstate  within  ten  days  the  original  amount 
deposited  if  in  his  opinion  or  in  the  opinion  of  the  War  Department  of  the 
United  States  such  reinstatement  is  necessary  to  the  interests  of  the  L^nited 
States,  and  that  upon  ten  days'  written  notice  to  the  purchasers  said  trustee 


UNITED  STATES  LIQUIDATION   COMMISSION.  129 

may  withdraw  the  entire  amount  of  £250,000  to  the  credit  of  the  United  States 
on  account  of  the  purchase  price  of  this  contract;  provided,  further,  that  on 
July  1,  1920,  any  remaining  balance  of  the  two  hundred  fifty  thousand  pounds 
will  be  applied  upon  the  payment  due  on  that  date,  as  provided  for  in  section  5. 
Section  5.  The  purchase  price  now  remaining  unpaid,  namely,  £2,925,000 
(subject  to  additions  or  deductions,  in  accordance  with  the  provisions  of  Article 
Four  of  the  original  contract  and  the  provisions  of  this  supplemental  contract), 
shall  be  paid  in  three  equal  installments,  the  first  maturing  July  1,  1920,  the 
second  maturing  December  1,  1920,  and  the  third  maturing  April  1,  1921.  The 
purchasers  jointly  and  severally  agree  to  pay,  on  the  entire  balance  of  said 
purchase  price  remaining  unpaid  on  April  1,  1920,  interest  from  said  date 
until  paid  at  the  rate  of  five  per  centum  (5%)  per  annum;  the  provisions  of 
the  original  contract  with  respect  to  the  payment  of  the  principal  to  govern  also 
the  payment  of  said  interest. 

Section  6.  Save  as  herein  modified  or  amended,  the  said  original  contract 
shall  be  and  it  is  hereby  in  all  things  continued  in  effect,  ratified,  confirmed, 
and  reaffirmed. 

In  witness  whereof,  on  the  day  and  year  first  above  written,  this  contract 
has  been  executed  in  six  parts,  each  having  the  full  force  and  effect  of  an 
original,  by  the  United  States  of  America,  acting  through  the  United  States 
Liquidation  Commission — War  Department.  Edwin  B.  Parker,  chairman,  of 
the  one  part;  and  by  Owen  Clegg,  James  Todd,  and  George  W.  Parkinson  (lieu- 
tenant colonel);  Arthur  Huntley  Walker;  Soci§t6  Anonyme  Darracq,  acting 
through  Owen  Clegg,  duly  authorized  tiiereto ;  A  Darracq  &  Company  (1905), 
Ltd.,  acting  through  A.  Huntley  Walker  and  James  Todd,  duly  authorized 
thereto;  Clement  Talbot,  Ltd.,  acting  through  A.  Huntley  Walker,  duly  au- 
thorized thereto;  by  Sir  Percival  Perry  individually,  and  by  The  Motor  Or- 
ganizations, Limited,  acting  through  James  Todd  and  Sir  Percival  Perry,  Colonel 
Brinsley  John  Hamilton  Fitzgerald,  duly  authorized  thereto,  on  the  other  part. 

United  States  of  America, 
By  Edwin  B.  Paeker, 
Chairman,  United  States  Liquidation  Commission — War  Department. 
Owen  Clegg. 
James  Todd. 

G.  W.  Parkinson,  Lt.  Col. 
Arthur  Huntley  Walker. 
Societe  Anonyme  Darracq, 
By  Owen  Clegg,  Managing  Director.  ■ 

A.  Darracq  &  Company  (1905),  Ltd., 
By  A.  Huntley  Walker. 
James  Todd. 
Clement  Talbot,  Ltd., 
By  A.  Huntley  Walker. 
Percival  Perry. 

The  Motor  Organizations,  Limited, 
By  James  Todd. 
Percival  Perry. 

Col.  Beinsley  John  Hamilton  Fitzgerald. 
Witness  as  to  Edwin  B.  Parker : 

Edward   T.   Noble. 
Witness  as  to  all  the  signatures  of  G.  W.  Parkinson,  A.  Huntley  Walker,  Owen 
Clegg,  and  .Tames  Todd : 

•T.  H.  Watson,  150  New  Bond  St.,  London,  Secretary. 
183176—20- — 9 


130 


UNITED  STATES  LIQUIDATION   COMMISSION. 


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UNITED  STATES  LIQUIDATION   COMMISSION.  131 

APPENDIX  XVIII. 

(1)   Final  Contract  of  Settlement, 
british  artillery  and  artillery  ammunition  convention,  dated  august 

9,    1919. 

Agreement  between  the  Government  of  His  Britannic  Majesty  and  the  Govern- 
ment of  the  United  States  with  respect  to  artillery  and  artillery  ammunition. 

DEFINITIONS.  ,  ~     ~ 

The  term  "  Great  Britain,"  as  used  herein,  shall  be  taken  to  mean  the  Gov- 
ernment of  His  Britannic  Majesty.  The  term  "  United  States,"  as  used  herein,, 
shall  be  taken  to  mean  the  Government  of  the  United  States  of  America.  The 
term  "  Artillery,"  as  used  herein,  shall  be  taken  to  mean  artillery  of  all  natures 
and  calibers,  including  components,  equipment,  and  spare  parts,  unless  otherwise 
specified.  The  term  "  ammunition,"  as  used  herein,  shall  be  taken  to  mean  artil- 
lery ammunition  of  all  natures  and  calibers  referred  to  in  the  agreement,  in- 
cluding components,  unless  otherwise  specified. 

RECITALS. 

From  time  to  time,  prior  to  October  19th,  1918,  the  United  States  placed 
orders  with  or  entered  into  contracts  with  Great  Britain,  by  which  Great  Britain 
agreed  to  manufacture,  or  caused  to  be  manufactured  and  delivered  to  United 
States,  certain  artillery  and  ammunition  of  the  natures  and  the  calibers  here- 
inafter mentioned.  All  such  agreements  were  merged  into  and  superseded  by 
that  certain  agreement  entered  into  between  the  United  States  and  Great 
Britain  on  the  19th  day  of  October,  1918,  as  evidenced  by  a  letter  from  Edward 
R.  Stettinius,  special  representative  of  the  Secretary  of  War  of  the  United 
States  of  America  to  the  ministry  of  munitions  of  war,  London,  England,  and 
the  indorsement  of  acceptance  thereon  by  Winston  S.  Churchill,  minister  of 
munitions,  acting  on  behalf  of  His  Britannic  Majesty's  Government,  which 
letter  and  acceptance,  together  with  Schedules  I,  II,  and  III,  accompanying 
and  forming  a  part  thereof,  are  hereunto  attached,  made  a  part  hereof,  and 
marked  for  identification  "  Exhibit  A."  Schedules  I  and  II  thereof  set  forth  the 
definitive  orders  placed  under  the  aforesaid  agreement. 

In  due  time  the  United  States  notified  Great  Britain  that  it  would  not  exer- 
cise its  option  to  purchase  the  artillery  specified  in  Schedule  III  of  the  said 
letter  of  October  19,  1918.  Following  the  signing  of  the  armistice  of  November 
11.  1918,  and  on  or  about  November  14,  1918,  the  United  States  notified  Great 
Britain  to  suspend  all  further  deliveries  of  artillery  and  ammunition  provided 
for  by  the  aforementioned  contract  of  October  19,  1918. 

The  parties  hereto  now  desire,  as  far  as  practicable,  to  relieve  the  United 
States  from  its  obligation  to  accept  and  pay  for  the  artillery  and  ammunition, 
covered  by  the  said  contract  of  October  19,  1918,  in  so  far  as  this  can  be  accom- 
plished without  loss  to  Great  Britain,  and  so  to  readjust  the  calibers,  types, 
and  natures  of  said  artillery  and  ammunition  to  be  taken  and  paid  for  by  the 
United  States  as  will  best  meet  its  needs  under  changed  conditions. 


132 


UNITED  STATES  LIQUIDATION   COMMISSION. 


AGKEEMENT. 

Now,  therefore,  in  consideration  of  the  facts  as  embraced  in  the  foregoing 
recitals,  and  of  the  respective  undertakings  of  the  contracting  Governments,' 
parties  hereto,  it  is  mutually  agreed  as  follows : 

Article  I.  Great  Britain  will  deliver  to  the  United  States,  and  the  United 
States  will  take  artillery  and  artillery  ammunition  as  follows,  and  pay  to  Great 
Britain  the  cost  thereof,  to  Great  Britain  being  a  total  of  £6,637,598. 

It  is  understood  and  agreed  between  the  contracting  parties  that  this  amount, 
as  set  forth  in  detail  below,  represents  as  nearly  as  possible  the  cost  of  articles 
to  be  supplied  under  this  agreement,  without  further  discussion  or  determina- 
tion of  prices. 


GUN  EQUIPMENTS. 


Nature. 


Cost  per 
unit. 


Number 
of  units. 


Total 
value. 


8-inch  howitzer,  Mark  VII 

8-inch  howitzer,  Mark  VI 

6-inch  gun,  Mark  XIX 

6-inch  gun  bodies  complete  with  breech  mechanisms 
60-pounder  gun 


£6,295 
6,390 
6,374 
2,060 
5,210 


84 
64 
100 
50 


£528,780 
408, 960 
637, 400 
103,000 

1,042,000 


2, 720, 140 


GUN  AMMUNITION. 


8-inch  high  explosive 

6-inch  gun  high  explosive. . 

Shrapnel 

60-pounder  high  explosive . 

Shrapnel 

High  explosive 

Shrapnel 


Total 

Grand  total. 


1  170,000 
125,000 
125,000 
2  33,500 
2  33,500 
166,500 
166,500 


£2,295,000 
243, 750 
256,250 
201,000 
206, 583 
349. 125 
365, 750 


3,917,458 
6,637,698 


Component. 


« Complete  roimds. 


Of  the  200  60-pounder  guns  embraced  in  the  foregoing  schedule  Great  Britain 
may,  at  its  election,  furnish  sixty  (60)  partly  worn  guns,  in  which  event  it 
will  without  further  expense  to  the  United  States  deliver  with  each  partly 
worn  gun  a  new  tube  for  relining  same.  The  said  tubes  shall  be  rough  bored 
and  furnished  on  the  outside  for  shrinkage. 

The  term  "complete  rounds"  as  used  in  the  foregoing  schedule  (and  else- 
where in  this  contract)  shall  be  taken  to  mean  shells  fully  assembled,  loaded 
(or  filled),  fuzed  (or  with  fuzes  packed  separately,  following  the  standard 
practice  for  safety  in  shipment  and  storage)  and  ready  for  use,  together  with 
the  propellant  and  primer.  The  term  "  components  "as  used  in  the  foregoing 
schedule  (and  elsewhere  in  this  contract)  shall  be  taken  to  mean  that  all  of 
the  parts  of  the  shell  shall  be  complete  in  themselves,  ready  for  assembling 
and  loading  (or  tilling)  but  unassembled,  and  the  shells  unloaded  (or  un- 
filled) ;  the  propellant  and  components  of  the  explosive  charges  will  be  de- 
delivered  in  bulk  in  satisfactory  containers,  and  the  cartridge  bags  and  primers, 
fuzes,  and  other  components  will  be  delivered  separately. 

The  condition  of  the  artillery  material  to  be  delivered  under  this  contract 
will  be  as  follows : 

#    (a)  Except  as  otherwise  specifled  all  material  to  be  new  or  relined  guns 
with  no  tiring  except  the  normal  proof  tiring  and  carriages  either  new   or 


UNITED  STATES  LIQUIDATION   COMMISSION.  133 

repaired.  The  new  and  i-elined  guns  and  the  new  and  overhauled  and  repaired 
carriages  will  have  gone  through  and  passed  the  standard  British  inspection 
for  material  to  be  passed  into  service. 

(b)  8"  howitzer,  Mark  VII. — Approximately  30  of  these  will  be  new — ^that  is, 
the  guns  will  be  new  or  relined,  having  been  fired  only  the  usual  number  of 
proof  rounds.  The  carriages  will  be  new  or  thoroughly  overhauled  and  re- 
paired. The  balance  of  these  howitzers  will  have  been  fired  a  limited  number 
of  rounds,  in  no  case  more  than  1,000,  and  it  will  be  understood  that  no 
howitzers  will  be  accepted  which  show  more  wear  than  the  normal  wear  for 
1,000  full  rounds.  The  carriages  will  be  new  or  entirely  overhauled  and  re- 
paired.   

(c)  8"  howitzer,  Mark  VI. — These  will  all  be  what  British  term  "new  ma- 
terial " — that  is',  guns  either  new  or  relined,  fired  only  the  usual  number  of  proof 
rounds.     Carriages  either  new  or  entirely  overhauled  and  repaired. 

(d)  6"  guns,  Mark  XIX. — Same  remarks  as  for  8"  howitzers,  Mark  VI. 

(e)  60-poiinder  guns. — 140  of  these  guns  and  carriages  will  be  new — that  is, 
guns  will  be  new  or  relined  and  fired  only  the  usual  number  of  proof  rounds. 
Carriages  either  new  or  entirely  overhauled  and  repaired.  The  additional  60 
60-pounder  guns  will  be  partly  worn;  as  many  as  possible  will  be  less  than 
50%  worn.     Carriages  will  either  be  new  or  entirely  overhauled  and  repaired. 

Article  II.  Tlie  United  States  agrees  to  deliver  and  Great  Britain  agrees  to 
accept  ninety  thousand  (90,000)  complete  rounds  of  9.2"  howitzer  ammunition, 
heretofore  manufactured  by  Great  Britain,  now  owned  by  the  United  States 
and  in  the  hands  of  the  American  Expeditionary  Forces,  in  France. 

Article  III.  In  consideration  for  the  undertaking  on  the  part  of  the  United 
States,  set  forth  in  Article  II  hereof,  Great  Britain  agrees  to  deliver,  and  the 
United  States  agrees  to  accept  in  addition  to  the  ammunition  specified  in 
Article  I. 

(a)  Fifty  thousand  (50,000)  rounds  (components)  H.  E.  shells  for  60-pounder 
guns. 

(&)  Two  hundred  and  sixty  thousand  (260,000)  rounds  (components)  of 
shrapnel  for  60-pounder  guns. 

It  is  understood,  however,  that  the  figure  of  the  90,000  complete  rounds  of 
9.2"  howitzer  ammunition  referred  to  in  Article  II  is  approximate  only,  and 
that  the  number  may  run  somewhat  more  or  less  than  90,000  rounds. 

Article  IV.  The  67,0(X)  complete  rounds  of  artillery  ammunition  for  60- 
pounder  guns  referred  to  in  Article  I  shall  be  delivered  by  Great  \Britain  at 
Calais,  France,  and  shall  there  be  placed  by  Great  Britain  free  of  charge  to  the 
United  States  upon  vessels  designated  by  the  United  States,  the  United  States 
accepts  responsibility  for  an  accident  or  explosion  occurring  in  the  course  of 
loading  on  the  said  designated  vessels. 

The  artillery  units  and  remaining  artillery  ammunition  referred  to  in  Articles 
I-  and  III  shall  be  delivered  by  Great  Britain  at  a  port  or  ports  to  be  agreed  in 
Great  Britain  (with  the  exception  of  explosives,  which  shall  be  delivered  at 
Liverpool,  except  873  short  tons  of  cordite,  which  shall  be  delivered  free  on 
rail  at  I'Assomption,  Canada,  and  402  short  tons  of  nitrocellulose,  which  shall  be 
delivered  free  on  rail  at  Upton's  Pit,  Canada)  and  shall  there  be  placed  by 
the  United  States  upon  vessels  designated  by  them. 

But  if  later  the  situation  should  arise  that  the  United  States  have  not 
sufficient  personnel  to  carry  out  this  work,  the  material  shall  be  placed  by 
Great  Britain  upon  ships  to  be  designated  by  the  United  States. 

During  the  period  in  which  the  United  States  has  the  necessary  organization 
at  the  port  of  delivery,  the  United  States  shall  bear  ^11  the  costs  of  off-loading 


134  UNITED  STATES  LIQUIDATION   COMMISSION. 

from  railway  trucks  and  loading  on  to  the  ship  and  during  the  period  when 
Great  Britain  undertakes  the  loading  of  the  ship,  Great  Britain  in  its  turn  shall 
Jbear  these  charges. 

From  time  of  delivery  in  truck  at  the  port  or  rail,  as  the  case  may  be,  the 
United  States  accepts  responsibility  for  any  accident  or  explosion  occurring 
from  the  said  material.  Great  Britain  accepts  responsibility  for  any  accident 
or  explosion  occurring  from  said  material  until  it  is  delivered  at  the  port  or 
rail  and,  during  the  period,  if  any,  when  Great  Britain  undertakes  the  loading 
under  par.  3  of  this  article  until  it  is  delivered  into  ships. 

The  90,000  complete  rounds  of  9.2"  howitzer  ammunition  referred  to  in 
Article  II  shall  be  delivered  by  the  United  States  to  Great  Britain  on  vessels 
at  a  port  or  ports  of  Great  Britain  to  be  agreed,  and  there  unloaded  from  the 
vessels  by  Great  Britain,  and  Great  Britain  accepts  liability  for  any  accident 
or  explosion  occurring  in  the  course  of  unloading  at  the  port  of  delivery. 

Article  V.  Each  four  of  the  artillery  units  referred  to  in  Article  I  shall 
comprise  the  equipment  and  store  prescribed  for  a  battery  of  four  pieces  in 
the  equipment  lists  annexed  hereto,  marked  for  identification.  Exhibits  "  B," 
*'  C,"  "  D,"  and  "  E." 

Article  VI.  Payment  for  the  artillery  and  ammunition  specified  in  Article 
I  hereof  shall  be  made  as  follows:  Ninety  per  centum  of  the  contract  price 
thereof  shall  be  payable  to  Great  Britain  upon  the  execution  of  this  contract, 
payment  of  a  bill  for  this  proportionate  amount  having  been  authorized  by  the 
United  States  Liquidation  Commission,  War  Department,  as  payment  on  ac- 
count and  in  advance  of  deliveries  and  five  per  centum  thereof  shall  be  pay- 
able upon  the  completion  of  deliveries  of  the  ammunition  and  of  the  artillery, 
equipments,  and  stores  specified  in  Exhibits  "  B,"  "  C,"  "  D,"  and  "  E,"  hereto 
annexed,  except  the  stores  described  in  these  exhibits  as  "  spares,"  and  five  per 
centum  thereof  upon  completion  of  all  deliveries  due  under  Article  I  of  the 
contract. 

Article  VII.  In  addition  to  the  nonual  equipment  of  these  batteries,  as 
specified  in  Article  V,  Great  Britain  agrees  to  deliver,  and  the  United  States 
agrees  to  accept  and  pay  for  the  additional  spare  parts  for  these  gun  equip- 
ments shown  on  list  hereto  attached  and  marked  for  identification  Exhibit  "  F." 

The  United  States  agrees  to  pay  to  Great  Britain  (in  addition  to  the  total 
sum  of  £6,637,598  referred 'to  in  Article  I),  upon  delivery  of  these  additional 
spare  parts,  the  unit  prices  as  set  forth  on  this  list,  which  represent  the  cost 
of  these  articles  without  profit  to  Great  Britain.  Where  prices  are  not  specified 
in  the  list  the  prices  to  be  paid  shall  be  sums  representing  cost  of  the  articles 
without  profit  to  Great  Britain. 

Article  VIII.  The  obligations  arising  under  this  agreement  shall  completely 
and  in  all  things  supersede  those  arising  under  the  aforementioned  contract 
of  October  19,  1918,  and  all  other  agreements  heretofore  made,  binding  the 
United  States  to  accept  from  Great  Britain  and  pay  for  artillery  or  artillery 
ammunition  :  Provided,  however,  the  United  States  shall  not  be  relieved  of  its 
obligation  to  pay  for  all  artillery  components,  spare  parts  and  ammunition, 
heretofore  delivered  to  it  by  Great  Britain  prior  to  November  14,  1918,  or  that 
were  in  the  course  of  delivery  on  that  date  and  were  actually  delivered  prior 
to  January  1st,  1919,  and  for  which  it  has  not  yet  paid. 

ARTICLE  IX.  Great  Britain  agrees  and  obligates  itself  (so  long  as  it  may 
continue  to  produce  the  same)  at  cost  to  it,  to  supply  the  United  States  with 
spare  parts  and  materials  or  components  required  by  the  United  States  from 
time  to  time  for  the  maintenance  of  the  artillery  delivered  by  Great  Britain  to, 
and  paid  by,  the  United  States  in  pursuance  of  the  terms  hereof. 


Approved : 


UNITED  STATES  LIQUIDATION  COMMISSION.  135 

Article  IX.  Great  Britain  agrees  and  obligates  itself  to  supply  the  United 
States  with  two  complete  sets  of  prints,  suflSciently  translucent  to  have  blue 
prints  made  therefrom,  of  all  general  and  detailed  drawings  of  the  artillery  and 
ammunition  to  be  delivered  hereunder,  including  drawings  of  all  tools  and  ac- 
cessories, sights  and  accessory  vehicles,  to  be  delivered  with  the  foregoing 
artillery  and  ammunition. 

The  United  States  agrees  and  obligates  itself  not  to  publish  the  said  prints 
and  to  treat  as  confidential  any  prints  which  are  so  marked. 

In  witness  whereof,  the  undersigned  have  subscribed  these  presents  upon 
behalf  of  their  respective  Governments,  as  of  this,  the  9th  day  of  August, 
A.  D.  1919.  —  -^ 

(Sgd.)  E.   D.  Bricker, 

Colonel,  Ordnance  Department,  for  Chief  of  Ordnance, 

War  Department,   United  States  of  America. 
(Sgd.)  A.  Watson, 

Representative  of  Minister  of 

Munitions  of  Great  Britain. 
Witness : 

(Sgd.)  R.  E.  Kimball, 

Lt.  Col.,  Ord.  Dept. 

United  States  Liquidation  Commission, 
War  Department. 
(Sgd.)  Edwin  B.  Parker,  Chairman. 

<2)    Covering    Letter    on    Artillery    and    Ammunition    Settlement — Judge 

Parker  to  Mr.  Layton. 

August  9,  1919. 
Subject :    Settlement  of  claim  of  Great  Britain  against  the  United  States  War 

Department  for  artillery  and  ammunition. 
Mr.  W.  T.  Layton. 

Ministry  of  Munitions,  London,  England. 

My  Dear  Mr.  Layton  :  In  connection  with  the  execution  of  the  contract  dated 
August  9th,  signed  by  Mr.  W^atson  representing  Great  Britain,  and  by  Colonel 
Bricker  representing  the  War  Department  of  the  United  States,  evidencing  the 
full  and  complete  settlement  of  all  claims  of  Great  Britain  against  the  War 
Department  of  the  United  States,  involving  undertakings  on  the  part  of  Great 
Britain  to  furnish  to  the  United  States  War  Department  artillery  and  ammu- 
nition, it  is  understood : 

1.  This  contract  as  executed  evidences  a  full,  complete,  unqualified,  and 
unconditional  settlement  of  the  matters  therein  dealt  with. 

2.  It  now  develops,  however,  that  Great  Britain  may  not  be  able  to  furnish 
out  of  stock  all  of  the  spare  parts  called  for  by  the  contract  for  some  of  the 
8-inch  howitzers,  not  exceeding  61  in  number,  and  Great  Britain  contends  that, 
as  the  schedule  of  units  to  be  delivered  by  Great  Britain  to  the  United  States 
was  changed  at  the  request  of,  and  for  the  benefit  of  the  United  States,  Great 
Britain  should  not  now  be  required  to  incur  additional  expense  to  manufacture 
these  spare  parts  for  the  benefit  of  the  United  States;  and  you  suggest  that 
if  the  cost  to  Great  Britain  of  producing  the  spare  parts  in  question  should 
exceed  50,(X)0  pounds,  such  excess  cost  should  be  equally  divided  between  Great 
Britain  and  the  United  States. 

3.  In  behalf  of  the  United  States  I  decline  to  commit  the  United  States  to 
pay  any  part  of  this  possible  ex<?ess  cost,  but  agree  that  when  the  facts  are 


136  UNITED  STATES  LIQUIDATION  COMMISSION. 

fully  developed,  and  you  are  in  a  position  to  advise  to  what  extent,  if  at  all, 
it  is  necessary  for  Great  Britain  to  manufacture  additional  spare  parts  in 
order  to  comply  with  the  contract,  your  proposition  will  then  be  further  exam- 
ined and  considered  by  the  representatives  of  the  United  States,  without  com- 
mitment, however,  to  modify  the  contract  in  any  particular. 

4.  Without  committing  the  United  States  to  the  recognition  thereof,  it  is 
also  understood  that  Great  Britain  is  not  foreclosed  by  this  contract  to  pre- 
sent her  claim,  if  any  she  has,  for  interest  or  for  excess  value,  if  any,  of  ma- 
terial obtained  for  the  replacement  of  British  material  used  in  the  manufac- 
ture of  artillery  and  ammunition  described  in  said  contract. 
Yours  very  sincerely, 

(Sgd.)  Edwin  B.  Parker.  Chairman. 

Mr.  Lay  ton  acknowledged  the  receipt  of  the  above  letter  on  August  13,  1919. 


APPENDIX  XIX. 

Atjstbalian  Wool  Settlement. 
(Par.  6,  Cuthell-Inverforth  agreement  of  May  10,  1919.) 

The  United  States  agrees  to  pay  for  the  wool  purchased  from  Great  Britain 
under  the  contract  of  October  1,  1917,  on  the  basis  of  the  civil  issue  price,  less 
two  and  one-half  pence  (2id.),  in  accordance  with  the  bills  already  rendered, 
covering  approximately  247,000  bales.  The  United  States  also  agrees  to  pay 
the  bills  rendered  by  Great  Britain  for  storage  and  insurance  in  Australia  and 
for  interest  on  delayed  payments  under  this  contract,  amounting  approximately 
to  $850,000,  and  the  United  States  agrees  to  waive  all  claims  to  a  military 
rebate  on  the  entire  247,000  bales  or  any  portion  thereof. 

The  United  States  Government  agrees  to  pay  for  the  115,000  bales  already 
shipped  under  contract  of  November  7,  1918,  on  the  basis  of  the  civil  issue  price, 
less  two  and  one-half  pence  (2id.),  in  accordance  with  the  bills  already  ren- 
dered, and  agrees  to  pay  the  one  penny  per  pound  premium-  for  selection,  as 
set  forth  in  the  contract,  waiving  any  question  as  to  whether  this  selection  was 
obtained.  There  shall  be  no  claim  for  interest  or  storage  made  against  the 
United  States  covering  any  of  the  wool  undelivered  under  this  contract  by 
Great  Britain. 

Great  Britain  agrees  to  cancel  without  cost  to  the  United  States  all  obligations 
on  its  part  to  take  delivery  of  the  undelivered  portion  of  the  wool  covered  by 
said  contract  of  November  7,  1918,  the  total  of  which  amounts  approximately 
to  210,000  bales.  The  contract  with  regard  to  such  210.000  bales  of  wool  is 
hereby  agreed  to  be  null  and  void. 


APPENDIX  XX. 

Chateaueoxjx  Tank  Plant  Settlement  (August  8,  1919). 

Agreement  between  the  Government  of  His  Britannic  Majesty  and  the  Govern- 
ment of  the  United  States  of  America  with  respect  to  the  Chateauroux  tank 
project. 


UNITED  STATES  LIQUIDATION   COMMISSION.  137 

DEFINITIONS. 

The  term  "  Great  Britain  "  as  herein  used  means  tlie  Government  of  His 
Britannic  Majesty.  The  term  "  United  States "  as  herein  used  means  the 
Government  of  the  United  States  of  America.  The  term  "  Chateauroux  plant " 
as  herein  used  shall  be  taken  to  mean  the  projected  work  gf  construction  to  be 
undertaken  in  France  pursuant  to  the  contract  between  the  United  States  and 
Great  Britain,  such  contract  being  dated  January  22,  1918,  a  copy  of  the  same 
being  hereto  attached,  marked  Exhibit  "  A,"  and  such  term  shall  be  deemed  to 
include  all  matters  and  acts  to  be  done  or  performed  by  either  Government 
under  such  contract,  other  than  the  manufacture  of  components  for  tanks  pTu-~ 
vided  for  by  subdivision  2  of  paragraph  1  of  the  said  contract,  and  the  replace- 
ment of  steel  as  provided  for  by  paragraph  6  of  said  contract. 

RECITALS. 

By  reason  of  the  armistice  the  necessity  for  carrying  out  the  contract  between 
the  parties  dated  January  22,  1918,  Exhibit  "  A  "  having  terminated  and  the 
work  of  erecting  and  equipping  Chateauroux  plant  having,  by  mutual  agreement, 
been  discontinued,  and  there  existing  against  the  French  Republic  (hereinafter 
called  France)  an  equitable  claim  on  account  of  the  allotment  to  it  of  750  of 
the  tanks  allotted  to  Great  Britain  and  150  of  the  tanks  allotted  to  the  United 
States  under  said  contract,  and  France  having  tentatively  agreed  to  purchase 
from  Great  Britain  and  the  United  States  the  Chateauroux  plant  and  to  pay 
therefor  and  in  consideration  of  the  aforesaid  equitable  claim  the  sum  of  twenty 
million  francs,  and  the  parties  hereto  desiring  to  adjust  and  settle  their  re- 
spective interests  in  said  consideration  and  to  liquidate,  adjust,  and  settle  the 
matters  covered  by  said  contract  of  January  22,  1918,  agree  as  follows : 

AGREEMENT. 

Article  I.  The  expenditures  of  the  parties  incurred  in  carrying  out  said 
contract  of  January  22nd,  1918,  other  than  these  contracted  for  pursuant  to  sub- 
division 2,  paragraph  1  thereof,  shall  be  divided  equally  between  the  parties. 

Article  II.  The  work  of  liquidation,  including  the  sale  of  property  and  the 
settlement  of  all  claims  of  contractors  or  third  parties  not  already  concluded, 
shall  be  conducted  by  Great  Britain.  To  the  end  that  the  liquidation  may 
be  carried  out  to  the  best  advantage,  further  expenditures  may,  if  necessary, 
be  authorized  by  Great  Britain,  materials  may  be  accepted,  indemnity  under 
existing  contracts  and  subcontracts  paid,  land  purchased,  and  other  acts  deemed 
essential  to  the  best  interests  of  the  respective  Governments  and  the  proper 
liquidation  and  preservation  of  the  assets  may  be  done  and  performed. 

Article  III.  An  account  shall  be  taken  every  six  months  of  all  moneys  paid 
out  and  expended  by  the  respective  Governments  in  pursuance  of  the  contract, 
including  settlements  and  indemnities  paid  in  contemplation  of  the  abandonment 
of  the  project,  and  each  Government  shall  pay  to  the  other  whatever  balance 
may  be  due  from  it  as  shown  by  such  account;  provided,  however,  that  ex- 
penditures made  by  either  Government  pursuant  to  the  provisions  of  sub- 
division 2  of  paragraph  1  of  the  contract  shall  not  be  included.  It  is  further 
agreed  that  expenditures  made  by  either  Government  pursuant  to  the  provi- 
sions of  subdivision  2  of  paragraph  1  of  the  contracts  are  declared  equal  and 
are  set  off,  the  one  against  the  other.  Each  Government  shall  retain  title  to 
all  material  manufactured  by  it  pursuant  to  the  provisions  of  subdivision  2 


138  UNITED  STATES  LIQUIDATIOIST   COMMISSION. 

of  paragraph  1  of  said  contract,  niid  neither  Government  shall  make  any  claim 
for  reimbursement  on  account  of  expenditures  made  by  it  pursuant  to  the 
provisions  of  subdivisions  2  of  paragraph  1,  nor  are  such  expenditures  to  be  in 
any  manner  taken  into  account  in  settling  the  obligations  of  the  parties  pur- 
suant to  this  agreement. 

Article  IV.  The  commission  created  by  the  agreement  of  January  22nd, 
1918,  consisting  of  Lieutenant  Colonel  A.  G.  Stern,  Q.  M.  C,  and  Major  J.  A. 
Drain,  U.  S.  R.,  is  hereby  dissolved. 

Aeticle  V.  The  obligations  devolving  upon  the  United  States  by  virtue  of 
paragraph  6  of  the  contract  of  January  22,  1918,  are  hereby  discharged,  and 
the  rights  created  thereby  in  favor  of  Great  Britain  are  waived  and  relin- 
quished by  the  Government  of  Great  Britain. 

Article  VI.  The  factory  built  pursuant  to  said  contract  of  January  22,  1918, 
shall  be  sold  to  France  pursuant  to  the  agreement  heretofore  tentatively  agreed 
upon  whereby  France  is  to  pay  as  the  purchase  price  thereof  and  in  considera- 
tion of  the  equitable  claim  heretofore  referred  to  the  sum  of  twenty  million 
francs,  and  said  sum  shall  be  divided  between  the  parties  hereto  in  the  pro- 
portion of  seventy  per  centum  thereof  to  Great  Britain  and  thirty  per  centum 
thereof  to  the  United  States. 

In  witness  whereof  the  undersigned  have  subscribed  these  presents  on  behalf 
of  their  respective  Governments  as  of  the  8th  day  of  August,  nineteen  hundred 
and  nineteen. 

(Signed)  A.  Watson, 

Representative  of  the  Minister  of  Supplies  of  His  Britannic  Majesty. 

Edwin  B.  Parker, 
Chairman  of  the  United  States  Liquidation  Commission, 

War  Department  of  the  United  States  Government. 


APPENDIX  XXI. 

(1)   Final   Contract   of    Settlement   of    the    Chateauroux   Tank    Project 

(Oct.  4,  1919). 

Agreement  between  His  Britannic  Majesty's  Government  and  the  United 
States  of  America  in  final  settlement  of  the  Chateauroux  tank  project. 

This  agreement  is  supplemental  to  the  agreement  dated  August  8,  1919, 
signed  by  A.  Watson  on  behalf  of  His  Britannic  Majesty's  Government  and 
Edwin  B.  Parker  on  behalf  of  the  United  States  of  America,  and  supersedes 
the  Si^me  in  so  far  as  anything  herein  contained  may  be  inconsistent  therewith. 

In  consideration  of  the  mutual  agreements  herein  contained,  it  is  agreed  as 
follows : 

Article  I.  Promptly  upon  receipt  of  the  twenty  million  francs  (frs.  20,000,- 
000)  mentioned  in  Article  VI  of  said  agreement  of  August  8,  1910,  above  de- 
scribed. Great  Britain  or  the  Anglo-American  Commission,  as  the  case  may  be, 
shall  pay  six  million  francs  (frs.  6,000,000)  thereof  to  the  United  States. 
Against  receipt  of  said  six  million  francs  (frs.  6,000,000)  the  United  States 
shall  pay  the  ministry  of  munitions  of  His  Britannic  Majesty's  Government  the 
sum  of  fifty-four  thousand  and  ninety -five  pounds  sterling  (£54,095).  Such 
payment  by  the  United  States  shall  be  full  performance  of  Article  I  of  said 
agreement  of  August  8,  1919,  and  together  with  such  payment  by  Great 
Britain  shall  constitute  a  full  and  final  settlement  of  the  affairs  of  the  Anglo- 
American  Commission  and  of  the  Chateauroux  tank  project  and  of  all  interest 


UNITED  STATES  LIQUIDATION"   COMMISSION.  139 

and  liability  of  every  nature  of  the  United  States  in  respect  thereto,  except  as 
to  the  item  "  hidden  loss  on  steel "  hereinafter  mentioned. 

Article  II.  It  is  agreed  that  the  statement  designated  "  Schedule  I "  hereto 
attached  and  made  a  part  hereof,  together  with  all  items  and  amounts  therein 
contained  except  said  item  "  hidden  loss  on  steel,"  shall  be  considered  a  final 
and  conclusive  statement  of  the  affairs  of  the  Anglo-American  Commission. 

Article  III.  Neither  Government  shall  present  against  the  other  any  further 
claim  in  respect  to  the  above  described  tank  project  except  "  hidden  loss  on 
steel "  as  hereafter  provided.  In  the  event  that  upon  liquidation,  by  the  Anglo- 
American  Commission,  or  by  Great  Britain,  of  any  further  assets  which  accrue 
to  Great  Britain,  a  sum  is  realized  in  excess  of  any  estimate  contained  in  said_ 
Schedule  I,  such  excess  shall  be  retained  by  Great  Britain.  All  liabilities  of 
said  Anglo-American  Commission,  or  of  Great  Britain,  in  respect  to  said  tank 
project,  whether  as  set  forth  in  Schedule  I,  or  in  excess  of,  or  apart  from, 
any  liability  therein  stated,  shall  be  borne  by  Great  Britain  without  any  re- 
course whatever  against  the  United  States.  The  United  States  shall  retain 
without  accountability  to  Great  Britain  any  sum  hereafter  realized  by  it  upon 
any  assets  or  claim  within  its  control,  and  shall  not  present  any  further  claim 
against  the  Anglo-American  Commission. 

Article  IV.  Great  Britain  has  presented  a  claim  against  the  Anglo-American 
Commission  covering  "  hidden  loss  on  steel,"  which  is  referred  to  in  said 
Schedule  I  hereof.  It  is  agreed  that  this  item  shall  be  omitted  from  the  final 
settlement  provided  in  this  agreement  and  shall  be  included  in  the  claim  which 
Great  Britain  is  making  against  the  United  States  for  "  excess  costs  "  of  steel, 
and  shall  be  settled  on  the  same  basis  as  said  excess  costs  claim,  excepting  that 
Great  Britain  shall  be  entitled  to  receive  from  the  United  States  only  fifty  per 
cent  (50%)  of  the  amount,  if  any,  of  "hidden  loss  on  steel"  as  it  may  be 
determined  in  respect  to  the  steel  which  has  been  supplied  by  Great  Britain  to 
the  Anglo-American  Commission.  The  United  States  does  not,  either  directly 
or  inferentially,  admit  by  the  execution  of  this  agreement  any  liability  in 
respect  to  said  item  "  hidden  loss  on  steel "  as  contained  in  the  claim  presented 
by  Great  Britain. 

Article  V.  This  agreement  shall  be  void  and  of  no  effect,  and  said  agreement 
of  August  8,  1919,  above  referred  to,  shall  remain  in  full  force  and  effect,  in  the 
event  that  the  twenty  million  francs  (frs.  20,000,000)  mentioned  in  Article  VI 
of  said  agreement  of  August  8,  1919,  and  referred  to  in  Article  I  hereof,  is  not 
paid  as  in  said  Article  VI  provided. 

In  witness  whereof  this  agreement  has  been  executed  in  four  parts,  each 
having  the  full  force  and  effect  of  the  original,  by  His  Britannic  Majesty's  Gov- 
ernment acting  through  F.  W.  Phillips,  on  behalf  of  the  ministry  of  munitions, 
and  by  the  United  States  of  America,  acting  through  the  Liquidation  Com- 
mission— War  Department,  Edwin  B.  Parker,  chairman,  this  fourth  day  of 
October,  1919. 

His  Britannic  Majesty's  Government, 
By  F.  W.  Phillips, 

On  Behalf  of  the  Ministry  of  Munitions. 
United  States  of  America, 
By  Edwin  B.  Parker, 

Chairman  of  the  United  States 
Liquidation  Commission — War  Department. 


140 


UNITED  STATES  LIQUIDATION   COMMISSION. 


Schedule  I. — Anglo-American  Commission  {UmTcs),  cost  of  factory  and  general 

expenses. 

PAYMENTS.   JULY   31,    1919. 

Cash  payments  to  date :  Francs. 

Factory  construction 15,  611,  584.  04 

Factory  operation,  etc 2,  690,  831.  02 

General  administration 809,807.35 

Liquidation  expenses ^ 201,  726.  00 

Cancellation  of  orders 8,  072.  80  Francs. 

19,  822,  021.  21 

Estimated  further  cash  payments: 
To  contractors — 

Balance     of    commission     and     pending      ' 
claims  in  England,  say  £20,000,  @  32 

to  1 L 640,  000.  00 

Sundries — 

Balance  payable  for  material  supplied 
through  Great  Britain  (M.  of  M.)  and 
cancellation  of  orders,  less  credits,  say 

£4,000,  @  32  to  1 128,  000.  00 

Iviquidation  expenses,  London  office,  say 

£1,000,  @  32  to  1 32,  000.  00 

Miscellaneous  bills  and  claims  in  France, 

say 350, 000.  00 

510,000.00 

Due  to  British  ministry  of  munitions: 
Hidden  loss  on  steel.* 

Freight  on  construction  material £48,094 

Interest  on  advances  calculated  to  May  31st, 
1919 25, 190 


73,  284 
@32to 
Due  to  U.  S.  A. : 

Francs. 

Power  plant,  Chateauroux 686,757.26 

Track,  Neuvy-Pailloux 593, 296.  96 

Sundries  supplied  to  A.  A.  C 166,  928.  84 

1,  446,  983.  06 
Less  sundries  supplied  by  A.  A.  C 111,  967.  37 


41 


345,  088.  00 


1, 335,  015.  69 


24, 152, 124.  90 


1  Not  included  in  this  statement,  as  the  United  States  does  not  admit  it  as  claimed. 
This  item  is  to  be  taken  up  in  the  British  "  excess  cost "  claim,  as  provided  in  the  agiee- 
ment  covering  this  settlement  and  Is  to  be  borne  by  the  United  States  and  Great  Britain 
in  equal  shares,  to  the  amount,  if  any,  allowed  upon  the  determination  of  the  "  excess 
costs  "  claim. 


imiTED  STATES  LIQUIDATION"   COMMISSION.  141 

V.   S.  LIQUIDATION. 

Francs. 

Half  loss  as  above 11,781,024.93 

Less — 

Payment  to  Great  Britain  £300,000  on  May  Francs. 

12,  1919,  @  29.05 8,  715,  000.  00 

Material  supplied  by  U.  S.  A 1,  335,  015.  69 

10,  050,  015.  69 

Balance  due  to  Great  Britain 1,  731,  009.  24 

Balance  due  to  Great  Britain  in  sterling,  @  32  to  1 £54,  095r0a — - 

RECEIPTS,   JULY  31,    1919. 

Cash  receipts  to  date: 

Interest  from  banks 9,  293.  40 

Realization  of  assets —        180,  281.  65 

189,  575.  05 

Estimated  further  cash  receipts: 

Interest  from  banks,  say 500.00 

Realization  of  assets  (sale  of  miscellaneous 
material  in  C.  S.  D.  stores  in  England), 
say  £12,500,  @  32  to  1 400, 000.  00 

400,  500.  00 

Approximate  net  cost : 

U.  S.  A.,  50%  equals 11,  781,  024.  93 

British,   50%    equals 11,781,024.92 

23,  562,  049.  85 

24,152,124.90 

GREAT  BRITAIN  LIQUIDATION. 

Half  loss  as  above 11,781,024.92 

Payments  to  July  31st,  1919  (less  receipts) 19,132,446.16 

Estimated  further  payments  (less  receipts) 749,  500.  00 

Freight  and  interest 2,345,088.00 

22,  227,  034. 16 
Less  £3CK),000  from  U.  S.  A 8,  715,  000.  00 

13,  512,  034. 16 

Balance  due  from  U.  S.  A 1,  731, 009.  24 

Certified  correct : 

P.  W.  Phillips,  FirMncial  Liquidator. 

^2)    Tripartite   Memorandum   in    Settlement   of   the   Chateauroux   Tank; 

Project  (Oct.  9,  1919). 

Ministere  De  La  Reconstitution  Industrielle  : 

At  the  request  of  the  Inter-Allied  Committee  at  Versailles  the  Governments 
of  Great  Britain  and  of  the  United  States  of  America  undertook,  in  1918,  the 
manufacture  of  Anglo-American  tanks  known  under  the  name  of  "  Liberty,"  the 
component  parts  of  which  were  furnished  by  the  said  Governments  and  were  to 


142  UNITED  STATES  LIQUIDATION   COMMISSION. 

be  assembled  in  France  in  a  plant  constructed  by  these  Governments  at  Neuvy- 
Pailloiix,  near  Chateauroux. 

Subsequent  to  negotiations,  which  arose  after  the  armistice  between  the 
Ministere  de  la  Reconstitution  Industrielle,  Monsieur  Loucheur,  representing 
France;  Mr.  W.  Layton,  delegate  of  the  British  Minister  of  Munitions,  repre- 
senting the  British  Government;  and  Mr.  Edwin  B.  Parker,  chairman  of  the 
Liquidation  Commission,  representing  the  Government  of  the  United  States  of 
America,  the  liquidation  of  the  expenses  in  connection  with  the  manufacture 
of  "  Liberty  "  tanks  was  settled  as  follows,  subject  to  the  subsequent  ratification 
by  the  French  Chambers  of  the  credit  demanded  with  this  in  view : 

On  the  170  millions,  which  represent  the  total  of  the  expenses  incurred  by 
the  Governments  of  Great  Britain  and  of  the  United  Sates,  for  the  manufacture 
of  these  tanks,  the  French  Government  agrees  to  the  sum  of  20  millions. 
Furthermore,  it  is  stipulated  that  the  French  Government  will  relieve  the  Gov- 
ernments of  Great  Britain  and  the  United  States  of  all  payments  and  obliga- 
tions resulting  from  the  purchase,  occupation,  and  use  of  the  land  connected  with 
the  construction  of  the  Neuvy-Pailloux  plant. 

On  the  other  hand,  the  Governments  of  Great  Britain  and  of  the  United 
States  give  to  the  French  Government  in  full  ownership  the  buildings  and  rail- 
way tracks  built  at  Neuvy-Pailloux,  as  well  as  all  the  material  of  all  kinds 
which  are  in  the  plant  and  the  surrounding  land. 

The  credits  necessary  to  the  execution  of  this  agreement  having  been  granted 
by  the  finance  law  of  September  30th,  1919,  the  above  agreement  becomes 
definite. 

The  Sous  Secretaire  d'Etat  de  I'Administration  de  la  Guerre  will  decide  on 
the  way  in  which  the  sum  of  20  millions,  mentioned  above,  will  be  paid. 

Paris,  October  9,  1919. 

( Signed )  Loucheuk.  Labrami. 

Morel.  C.  C.  Barbie. 

Edwin  B.  Parker.  F.  W.  Phillips. 


APPENDIX  XXIL 

Extract  from  Cuthell-Invebfobth  Agreement  of  May  10,  1919. 

3.  liberty  motors  and  proper  proportion  of  sets  of  spare  parts. 

The  Bureau  of  Aircraft  Production  of  the  War  Department  of  the  United 
States  of  America  shall  deliver  a  number  of  Liberty  motors  which,  together 
with  the  Liberty  motors  delivered  to  date,  shall  equal  2,252.  Such  delivery  shall 
be  at  the  option  of  the  United  States,  either  at  seaport  in  the  United  States,  or 
from  stocks  of  the  American  Expeditionary  Forces  in  France.  It  shall  render 
a  bill  for  the  sum  of  $16,589,718.90.  Against  this  bill  there  shall  be  credited 
cash  payments  made  to  date  of  $2,625,000,  leaving  a  balance  due  of  $13,964,- 
718.90.  Such  bill  shall  be  accompanied  by  a  short  statement  to  the  effect  that 
for  the  purpose  of  the  settlement  of  this  bill  the  total  cost  (excluding  strictly 
military  charges)  of  materials,  plant,  tools,  and  all  other  elements,  is  fixed 
at  $153,515,619.  The  United  States  has  made  an  allowance  of  $2,700,000  on 
account  of  labor  expenditures  subsequent  to  the  armistice.  The  balance  charge- 
able to  Liberty  motor  construction  for  the  purposes  of  fixing  the  costs  of 
Liberty  motors  to  Great  Britain  is  fixed  at  $150,815,619.  It  is  also  agreed 
that  the  total  production  of  Liberty  motors  for  the  pun)Ose  of  the  settlement 
between  the  parties  hereto  is  20,478.     Great  Britain  has  purchased  and  will  take 


UNITED  STATES  LIQUIDATION   COMMISSION.  143 

a  number  of  motors  equal  to  eleven  per  cent  (11%)  of  the  total  production,  or 
2,252.  Great  Britain  shall  also  pay  eleven  per  cent  (11%)  of  all  cost  of  such 
production,  or  $16,589,718.90.  The  United  States  shall,  with  each  motor  and 
with  each  group  of  motors,  ship  the  same  proportionate  number  of  sets  of 
spares  which  it  shipped  under  the  contract  for  980  motors,  dated  July  11,  1918. 


APPENDIX  XXIII. 

Agreement  in  Settlement  of  the  British  Interest  Claim 

(Oct.  20,  1919).  

Agreement  between  His  Britannic  Majesty's  Government  and  the  United 
States  of  America  with  respect  to  interest  charges. 

definitions. 

The  term  "  Great  Britain  "  as  herein  used  means  His  Britannic  Majesty's 
Government.  The  term  *'  United  States  "  as  herein  used  means  the  Govern- 
ment of  the  United  States  of  America.  The  term  "  War "  as  herein  used 
means  the  war  between  the  United  States  and  the  nations  associated  with  it 
on  the  one  part  and  the  Imperial  German  Government  and  its  allies  on  the 
other  part. 

recitals. 

In  connection  with  the  prosecution  of  the  war  and  matters  arising  there- 
from, Great  Britain  has  invested  or  otherwise  disbursed  large  sums  of  money 
which  are  properly  chargeable  against  the  United  States.  Great  Britain  has 
felt  that  some  reimbursement  to  it  should  be  made  by  the  United  States  be- 
cause of  the  considerable  periods  of  time  elapsing  between  the  dates  of  such 
investments  or  disbursements  and  the  times  of  reimbursement  thereof  to  Great 
Britain  by  the-  United  States,  and  has  put  forward  a  claim  for  interest  on 
all  proper  bills  rendered  by  it  against  the  United  States.  The  United  States 
has  made  similar  investments  and  disbursements  which  are  properly  charge- 
able against  Great  Britain  and  has  presented  a  claim  for  interest  on  bills 
rendered  by  it  similar  to  any  interest  on  bills  rendered  by  Great  Britain. 

The  parties  hereto  desire  to  settle  and  adjust  all  claims  between  the  War 
Department  of  the  United  States  and  Great  Britain,  or  their  respective  agencies 
or  representatives,  for  interest,  or  other  compensation  on  account  of  delay, 
or  lapse  of  time,  in  the  rendering  or  in  the  payment  of  bills,  statements  or 
invoices,  or  delay,  or  lapse  of  time,  in  the  reimbursement  of  capital  expendi- 
tures, connected  with  the  prosecution  of  the  war. 

Now,  therefore,  it  is  agreed: 

Article  I.  For  the  purposes  of  this  agreement  and  the  settlement  of  the 
claims  intended  to  be  settled  and  adjusted  hereby,  and  for  no  other  purpose, 
the  statement  designated  "  Schedule  I,"  hereto  attached  and  made  a  part 
hereof,  together  with  all  items  and  amounts  therein  contained,  shall  be  a  final 
and  conclusive  statement  of  each  and  every  matter  referred  to  therein. 

Article  II.  The  United  States  shall  pay  to  Great  Britain  the  sum  of  seven 
hundred  and  ninety-seven  thousand  eight  hundred  and  fifty-four  pounds  eleven 
shillings  and  twopence  (£797,854  lis.  2d.)  set  forth  in  said  Schedule  I,  being  the 
interest  computed  at  the  rate  of  five  per  cent  (5%)  per  annum  for  a  period  of 
3|  months  upon  the  net  balance  between  the  aggregate  amounts,  respectively,  of 
all  bills  of  every  nature  rendered  in  the  United  States,  Great  Britain,  France,  or 
elsewhere,  by  each  of  said  Governments  against  the  other,  prior  to  August  1, 


144  UNITED  STATES  LIQUIDATION   COMMISSION. 

1919,  in  respect  to  transactions  arising  out  of,  connected  witli,  or  incident 
to  tlie  prosecution  of  the  war,  except  (1)  tlie  transfer  to  the  United  States 
of  certain  property  acquired  by  Great  Britain  from  the  Westinghouse  Electric 
and  Manufacturing  Company ;  (2)  matters  (particularly  ocean  transportation 
of  cargo  and  troops)  within  the  jurisdiction  of  the  ministry  of  shipping  of 
Great  Britain,  other  than  such  matters  as  may  be  covered  by  an  item  or 
items  of  said  Schedule  I;  (3)  matters  more  particularly  within  the  purview 
of  other  departments  of  the  United  States  other  than  the  War  Department, 
including  all  loans  from  the  United  States  to  Great  Britain;  and  (4)  obli- 
gations between  the  United  States  and  the  Dominion  of  Canada.  This  agree- 
ment shall  not  be  interpreted  to  prejudice  or  affect  in  any  way  whatsoever 
any  of  the  matters  referred  to  in  the  four  above-mentioned  exceptions,  either 
as  to  a  settlement  of  any  of  them,  or  of  interest  in  respect  to  any  of  them, 
or  otherwise. 

Article  III.  Great  Britain  does  hereby  release  and  discharge  the  United 
States — and  the  United  States  does  hereby  release  and  discharge  Great  Britain — 
from  all  obligations,  commitments,  claims,  or  demands  whatsoever  which  Great 
Britain  has  against  the  United  States  or  the  United  States  has  against  Great 
Britain,  as  the  case  may  be,  or  which  either  may  hereafter  have,  in  respect  to 
interest  upon  bills,  statements,  or  invoices,  compensation  for  delays  in  rendering 
or  in  paying  the  same,  reimbursement  of  costs  incurred  by  reason  of  such  delays, 
or  compensation  for  the  use  of  money  or  credits  or  for  capital  expenditures ;  in 
any  wise  pertaining  to  transactions  arising  out  of,  connected  with,  or  incident  to 
the  prosecution  of  the  war,  and  covered  by  bills  rendered  prior  to  August  1, 
1919,  irrespective  of  whether  stated  or  referred  to  in  said  Schedule  I ;  except 
the  matters  designated  (1),  (2),  (3),  and  (4)  herein  above  in  Article  II  hereof 
referred  to. 

Article  IV.  On  all  proper  bills  referred  to  in  said  Schedule  I  which  are  still 
outstanding  on  October  1,  1919,  interest  shall  accrue  at  the  rate  of  five  per  cent 
(5%)  per  annum  from  October  1,  1919.  In  respect  to  all  proper  bills  connected 
with  the  prosecution  of  the  war,  other  than  those  pertaining  to  the  above-men- 
tioned  matters,  designated  (1),  (2),  (3),  and  (4)  in  Article  II  hereof,  rendered 
on  or  after  August  1,  1919,  each  Government  shall  compute  the  amount  thereof 
outstanding  at  the  end  of  each  calendar  month,  and  all  such  bills  then  out- 
standing which  were  rendered  prior  to  the  first  of  said  calendar  month,  except 
bills  concerning  which  some  other  arrangement  has  been  made  in  respect  to 
interest  or  in  lieu  thereof,  shall  bear  interest  from  the  first  day  of  the  succeed- 
ing calendar  month  until  payment  of  such  bill,  at  the  rate  of  five  per  cent  (5%) 
per  annum.  Accrued  iijterest  shall  not  be  added  to  the  amount  of  any  bill  so 
as  to  result  in  the  compounding  of  interest  in  any  manner.  The  payment  of 
interest  as  herein  provided  shall  be  full  satisfaction  of  all  claims  and  demands 
whatsoever  for  interest  upon  bills,  statements,  or  invoices,  or  compensation 
for  delays  in  rendering  or  in  paying  the  same,  or  reimbursement  of  costs  in- 
curred by  reason  of  such  delays,  or  compensation  for  the  use  of  money  or  credits 
or  for  capital  expenditures,  in  any  wise  pertaining  to  the  transaction  for  which 
the  bills,  upon  which  such  interest  has  been  paid,  shall  have  been  rendered. 
No  bill  shall  be  considered  as  a  proper  bill  hereunder  until  rendered  in  finally 
correct  form. 

In  witness  whereof  this  agreement  has  been  executed  in  four  parts,  each 
having  the  full  force  and  effect  of  an  original,  by  His  Britannic  Majesty's 
Government,  acting  through  A.  Watson,  representative  of  the  minister  of 
munitions,  and  by  the  United  States  of  America,  acting  through  the  Liquidation 


UNITED  STATES  LIQUIDATION  COMMISSION. 


145 


Commission,  War  Department,  Edwin  B.  Parker,  chairman,  this  twentieth  day 
of  October,  1919. 
Witness : 

Rurus  J.  Trimble. 

His  Beitannic  Majesty's  Government, 
By  A.  Watson, 

Representative  of  the  Minister  of  Munitions. 
Witness : 

RuFUS  J.  Trimble. 

United  States  of  America, 
By  Edwin  B.  Parker, 
Chairman  of  the  United  States  Liquidation  Commission — War  Department.  ~' 

Schedule  I. — Interest  statement — Summary  of  Mils  rendered  prior  to 

July  31,  1919. 


Department  account  or  claim. 

Amount. 

Pounds. 

Dollars. 

Francs. 

Great  Britain: 

Departmental  (bills  rendered  in  Great  Britain)— 

17,943,203.16.4 

674.021.16.5 

1,568,405.15.9 

11,822.2.7 

13,565,761.3.11 

12,731,260.2.0 

326,398.3.3 

78,871.17.5 

58,341.5.0 

153, 585. 17. 10 

262,066.19.5 

29,908,931.30 

Oldham  Aircraft  Ass.  plant 

300  tons  pig  lead 

War  office,  "  special "     

War  office,  "miscel." 

Post  office     

Office  of  works 

Air  ministry 

Record  of  trade 

Total  departmental 

47, 373, 758. 19. 11 

9,000,000.0.0 

213,  426.  0. 0 

Bills  rendered  in  France         .  .    .  . 

Bills  rendered  in  U.  S.  A 

Total 

56,587,185.8.11 
1,500,000.0.0 

29.908,931.30 

Net  total,  British 

55,087,185.8.11 

29,908.931.30 

United  States: 

Bills  rendered  in  U.  S.  A 

45,494,345.36 
128,497.09 

BiUs  rendered  in  France 

Bills  rendered  in  Great  Britain 

3,846.10.0 
173, 154. 17. 10 

3,162,530.18 

Net  total,  American 

177,001.7.10 

45,622,840.45 

3,182,530.18 

Balances: 

British 

54,910,184.1.1 

15,713,909.15 
£3,741,406.18.10 

u.  S 

3,182,530.18 
£106,084.6.10 

($4.20andfrs.  30to£l)      

3,847,491.5.8 

Net  balance  in  favor  of  Great  Britain      

51,062,692.15.5 
797,854.11.2 

Interest  on  net  balance  for  3f  months  @  5%         .  -  . 

APPENDIX  XXIV. 

Liquidation  of  the  Nitrate  Pool 
(Sept.  15,  1919). 


Agreement  between  His  Britannic  Majesty's   Government   and   the   United 
States  of  America  with  respect  to  the  Nitrate  Pool. 
183176—20 10 


146  UNITED  STATES  LIQUIDATION   COMMISSION. 

DEFINITIONS. 

The  term  "  Great  Britain  "  as  herein  used  means  His  Britannic  Majesty's 
Government.  The  term  "  United  States "  as  herein  used  means  the  Govern- 
ment of  the  United  States  of  America.  The  term  "  Nitrate  "  as  herein  used 
means  refined  nitrate  of  soda.  The  tei-m  "  Pool "  as  herein  used  shall  be 
taken  to  mean  the  arrangement  between  Great  Britain  and  the  United  States 
entered  into  in  the  latter  part  of  1918,  pursuant  to  which  the  stocks  of  nitrate 
of  the  two  Governments,  to  the  extent  that  they  constituted  a  surplus  in  excess 
of  their  respective  internal  requirements,  were  considered  as  belonging  to  a 
common  pool,  and  pursuant  to  which  each  Government's  transactions  there- 
after, in  regard  to  such  surplus  stocks,  were  considered  to  be  on  behalf  of  such 
pool.  A  ton  in  this  agreement  means  a  long  ton  consisting  of  2,240  pounds.  A 
quintal  means  the  ordinary  Chilean  quintal  of  which  there  are  twenty-two  to- 
the  ton  of  2,240  pounds. 

BECITALS. 

Various  misunderstandings  have  arisen  as  to  the  nature,  force,  and  effect 
of  the  pool  and  each  of  the  above-named  Governments  has  put  forward  certain 
claims  in  respect  thereto.  There  is  now  no  useful  function  for  the  pool  to  con- 
tinue to  perform  and  the  parties  hereto  desire  to  settle  and  adjust  all  the^ 
aforesaid  claims,  to  equitably  apportion  between  the  two  Governments  the  re- 
maining nitrate  stocks  of  the  pool,  and  to  finally  liquidate  and  settle  the  pool, 
its  obligations,  profits  or  losses,  and  all  matters  pertaining  thereto. 

AGREEMENT. 

Now  therefore,  in  consideration  of  the  mutual  agreements  herein  contained 
it  is  agreed  as  follows : 

Abticle  I.  The  contributions  of  nitrate  by  said  Governments  to  the  pool  are 
fixed  at  the  following  approximate  quantities: 

Tons. 

His  Britannic  Majesty's  Government 436,300 

United  States  of  America 156,  776 

Total  pool  contributions 593,076 

The  unsold  balance  of  nitrate  remaining  in  the  pool  at  the  date  hereof,  is  ap- 
proximately 225,155  tons  as  m'bre  fully  set  forth  in  Schedule  I  hereto  attached 
and  made  a  part  hereof.  For  the  purposes  of  the  liquidation  of  the  pool  the- 
foregoing  figures  and  schedule  may  be  changed  by  mutual  agreement  to  con- 
form to  the  facts,  as  they  subsequently  may  be  determined  to  be,  without 
otherwise  affecting  the  terms  of  this  agreement. 

Article  II.  The  above-described  unsold  balance  shall  be  divided  between  the 
two  Governments  in  shares  in  the  proportions  that  their  respective  tonnage 
contributions  to  the  pool  are  to  the  total  pool  contributions.  The  nitrate  so  ap- 
portioned to  the  United  States  shall  be  made  up  of  the  nitrate  stocks  in  the 
United  States,  and  in  Canada  respectively,  together  with  such  American  pur- 
chased stocks  in  Chile  as  shall  be  mutually  agreed  upon  in  an  amount  suf- 
ficient to  complete  its  said  share.  The  nitrate  so  apportioned  to  Great  Britain 
shall  be  made  up  of  the  nitrate  stocks  in  the  United  Kingdom,  and  the  British 
purchased  nitrate  stocks  in  Chile,  together  with  the  balance  of  the  American 
purchased  nitrate  stocks  in  Chile. 


UNITED  STATES  LIQUIDATION   COMMISSION.  147 

Article  III.  The  United  States  shall  pay  to  the  pool,  by  means  of  a  debit 
to  it  in  the  settlement  of  the  pool's  accounts,  eight  shillings  and  sixpence 
(8/6d.)  per  quintal  for  the  stocks  now  in  the  United  States  and  Canada,  plus 
an  ocean  freight  charge  of  $17.50  per  ton  and  a  sum  equal  to  the  commercial 
marine  insurance  charges  for  the  shipment  of  such  nitrate  from  Chile  to  its 
present  location  at  rates  existing  on  September  15,  1919.  Great  Britain 
shall  pay  to  the  pool,  by  means  of  a  similar  debit,  eight  shillings  and  sixpence 
(8/6d.)  per  quintal  f.  a.  s.  for  the  stocks  located  in  Chile;  and  eight  shillings 
and  sixpence  (8/6d.)  per  quintal  for  the  stocks  now  lying  in  the  United  King- 
dom, plus  an  ocean  fi-eight  charge  of  140  shillings  per  ton  and  a  similar  marine 
Insurance  charge.  Some  portions  of  the  nitrate  stocks  may  be  "  ordinary "~ 
instead  of  "  retined  "  and  if  so  shall  be  taken  by  the  United  States  and  Great 
Britain  as  part  of  their  respective  shares  in  proportions  to  be  agreed  upon 
at  a  reduction  in  the  price  above  mentioned  of  4  pence  per  quintal,  and  such 
fact  shall  not  otherwise  affect  the  terms  of  this  agreement. 

Article  IV.  Upon  the  execution  of  this  agreement  title  to  the  stocks  now 
lying  in  the  United  Kingdom,  United  States,  and  Canada,  respectively,  shall 
pass  to  the  respective  Governments  entitled  thereto,  as  herein  provided,  as  of 
September  15,  1919,  and  title  to  the  stocks  in  Chile  shall  so  pass  when  the 
allocation  of  the  various  parcels  has  been  agreed  upon  as  provided  in  Article 
II  hereof.  Delivery  of  the  nitrate  shall  be  taken  in  each  case  where  it  lies 
save  that  the  nitrate  in  Chile  shall  be  put  free  alongside  at  the  expense  of 
the  pool.  Each  of  said  Governments  may  dispose  of  any  or  all  of  its  share 
of  stocks  immediately  upon  the  execution  of  this  agreement  and  may  advance 
any  sums  that  may  be  necessary  to  accomplish  delivery  thereof.  Such  ad- 
vances shall  be  a  charge  against  the  pool  in  so  far  as  they  are  made  to  meet 
a  pool  liability  herein  provided. 

Article  V.  Great  Britain  shall  pay  or  reimburse  the  United  States  the  costs 
of  breaking  the  stocks  in  Canada  sufficient  for  bagging  and  the  costs  of  re- 
bagging  the  same  where  necessary  (other  than  the  cost  of  the  bags).  The 
cost  of  the  bags  so  used  shall  be  borne  by  the  United  States.  Neither  the 
costs  of  breaking  and  bagging  nor  the  cost  of  the  bags  shall  be  a  charge 
aga..inst  the  pool. 

Article  VI.  After  the  15th  of  September,  1919,  the  nitrate  shall  be  at  the 
risk  and  all  charges  save  as  provided  in  Article  V  hereof  and  such  as  may  be 
necessary  to  put  the  nitrate  in  a  deliverable  condition  shall  be  for  the  account 
of  the  Government  which  acquires  the  particular  stock  as  herein  provided.  All 
charges  and  costs  which  have  been  properly  paid  or  incurred  in  connection 
with  the  acquisition,  custody,  or  disposal  of  the  total  stocks  of  the  pool  up  to 
and  including  the  15th  day  of  September,  1919,  shall  be  regarded  as  having 
been  paid  or  incurred  for  the  account  of  the  pool.  Silch  charges  and  costs 
shall  Include  the  purchase  price  of  the  pool  nitrate,  freight  or  other  trans- 
portation charges,  handling,  insurance,  storage,  other  carrying  charges,  and 
brokerage,  in  respect  thereto,  together  with  all  other  expense  which  has  arisen 
from  the  purchase,  disposal,  or  custody,  or  transportation  thereof,  including  any 
administrative  expenses  and  similar  charges  which  are  attributable  solely  to 
the  pool.  All  costs  paid  in  dollars  by  the  United  States  prior  to  November 
11,  1918,  in  respect  to  nitrate  turned  over  to  the  pool  by  it  shall  be  converted 
to  a  sterling  basis  at  a  rate  of  exchange  of  4.76,  subsequent  payments  of  dol- 
lars by  the  United  States  on  behalf  of  the  pool  shall  be  credited  to  the  United 
States  at  the  rate  of  exchange  ruling  at  the  date  the  particular  payment  shall 
have  been  made.  All  advances  by  either  Government  on  account  of  the  pool 
shall  bear  interest  at  the  rate  of  five  i)er  cent  (5%)  per  annum.  In  respect 
to  advances  made  prior  to  the  11th  day  of  November,  1918,  interest  shall  accrue 


148  UNITED  STATES  LIQUIDATION  COMMISSION. 

from  that  date,  and  in  respect  to  subsequent  advances,  from  the  date  of  the 
advance,  and  run  to  and  including  the  15th  day  of  September,  1919.  Such 
interest  shall  be  included  as  a  cost  on  account  of  the  pool.  The  proceeds  of 
all  sales  made  on  account  of  the  pool  shall  be  credited  to  it  and  interest  at 
said  rate  shall  be  credited  thereon  from  the  date  of  sale  to  the  15th  day  of 
September,  1919.  Any  advances  made  by  either  Government  after  the  15th 
day  of  September,  1919,  in  the  payment  of  any  obligation  which  arose  on  ac- 
count of  the  pool  prior  to  said  date,  shall  bear  interest  at  the  aforesaid  rate 
from  the  date  of  such  advance  until  the  reimbursement  thereof  by  the  pool. 
Article  VII.  The  profits  or  losses  of  the  pool,  as  the  case  may  be,  shall  be 
determined  as  expeditiously  as  possible  as  of  the  15th  day  of  September,  1919, 
including  in  such  determination  the  transactions  for  the  liquidation  of  the  Pool 
herein  provided.  Such  profits  or  losses  shall  be  divided  between,  or  borne  by, 
Great  Britain  and  the  United  States  in  the  proportions  provided  in  Article  II 
hereof  for  the  apportionment  of  the  nitrate  stocks  of  the  pool. 

Article  VIII.  The  United  States  shall  not  dispose  of  any  part  of  its  share  of 
the  nitrate  stocks  of  the  pool  in  the  United  Kingdom  or  in  the  Dominions  of 
the  British  Empire,  except  that  it  may  sell  in  Canada  an  amount  equal  to  its 
Canadian  stocks,  and  Great  Britain  shall  not  dispose  of  any  part  of  its  share  in 
the  United  States  or  its  possessions  or  territories.  Each  Government  shall 
secure  a  stipulation  from  the  purchaser  from  it  that  such  purchaser  and  pur- 
chasers in  turn  from  it  shall  be  bound  by  the  same  restrictions  as  the  selling 
Government. 

Article  IX.  The  general  custom,  of  trade  shall  apply  to  the  transactions 
forming  the  subject  of  this  agreement  except  where  special  provision  is  ex- 
pressly made  herein. 

In  witness  whereof,  this  agreement  has  been  executed  in  four  parts,  each 
having  the  full  force  and  effect  of  the  original,  by  His  Britannic  Majesty's 
Government,  acting  through  the  minister  of  munitions,  and  by  the  United 
States  of  America,  acting  through  the  United  States  Liquidation  Commission — 
War  Department,  Edwin  B.  Parker,  chairman,  as  of  the  15th  day  of  September, 
A.  D.  1919. 
Witness : 

RuFUS  J.  Trimble. 

His  Britannic  Majesty's  Government, 
By  Henry  Howard  Piggott, 
For  and  on  Behalf  of  the  Minister  of  Munitions,  Assistant  Secretary. 
Witness : 

RuFus  J.  Trimble. 

United  States  of  America, 
By  Edwin  B.  Parker, 

Chairman  of  the  United  States  Liqui- 
dation Commission — War  Department. 

(Copy.) 

Ministry  of  Munitions  of  War, 
Surplus  Government  Property  Disposal  Board, 

Explosives  and  Chemicals  Section, 
Storey's  Gate,  Westminster,  S.  W.  1,  10th  November,  1919. 
.  Dear  Sir  :  I  am  sorry  that  it  has  not  been  possible  for  me  to  write  you  earlier 
putting  on  record  the  arrangements  that  were  made  at  our  interview  on  5th 
November. 


UITITED  STATES  LIQUIDATION   COMMISSION.  149 

The  contributions  of  nitrate  set  out  in  Article  I  of  the  agreement  were  modi- 
tied  by  the  addition  of  328  tons  to  the  British  figure  and  620  tons  to  the  U.  S.  A. 
figure ;  the  revised  figures  being  as  follows : 

Tons. 

His  Britannic  Majesty's  Government 436,  628 

U.  S.  A.  Government 157,396 

Total  pool  contributions 594,  024 

The  figures  in  Schedule  I  were  further  revised  to  read  as  follows : 
Great  Britain :  Tons. 

Stocks  in  Chile 2, 050 

Stocks  in  U.  K 58,468  .] 

Stocks  in  Canada 16, 598  ; 

77,116 

America : 

Stocks  in  Chile 120,  681 

Stocks  in  America 28,  376 

149,  057 

226,173 
A  fresh  calculation  was  made  showing  the  proportions  of  unsold  stocks  to  be 
as  follows : 

His  Britannic  Majesty's  Government:  Tons. 

Stocks  in  U.  K 58,  468 

British  stocks  in  Chile 2,  050 

U.  S.  A.  stocks  in  Chile 105,  727 

166,  245 

U.  S.  A.  Government: 

Stocks  in  Chile 14,  954 

Stocks  in  U.  S.  A 28,  376 

Stocks  in  Canada 16,  598 

59,928 

It  was  understood  that  you  were  agreeing  these  figures  by  cablegram,  and  I 
hope  to  receive  your  confirmation  at  a  very  early  date. 
Yours  faithfully, 

(Signed)  H.  S.  Mingabd. 

Schedule  I. — Unsold  balance  remaining  in  pool  at  15  Sept.,  1919. 

Great  Britain:  Tons. 

Stocks  in  Chile 2, 050 

Stocks  in  U.  K 58, 468 

Stocks  in  Canada 16, 200 

76,718 

America : 

Stocks  in  Chile 120,222 

Stocks  in  America : 28,  215 

148, 437 

225, 155 
The  above  figures  are  approximate  only. 


150 


UNITED  STATES  LIQUIDATION-   COMMISSION. 

APPENDIX  XXV. 

Authorisations  to   1*ay  Claims. 


Num- 
ber of 
claims. 

Arising  in— 

Kind  of  money. 

Amount 
claimed  by 
claimant. 

Amount 
allowed  by 
Commission. 

328 

France 

French  francs. 

76  949  049  35 

S9  r«7   .f;9Q  9n 

63 

Switzerland 

Swiss  francs 

3,'553;399.22  j      2;  034;  096!  60 
391  252  40             286  602  40 

4 

Spain ..: 

1 

France         .  .  . 

Swedish  kroner  . 

40  991  00              ^7' 1QQ  on 

1 

England 

American  dollars 

1,650.35 

370,793/1/4 

1' 650. 35 

49 

England 

364,449/17/10 

446 

Note.— Poes  not  include  claims  of  foreign  Governments. 

Claims  Disallowed  by  Commission. 


Num- 
ber of 
claims. 

Arising  in— 

Kind  of  money. 

Amount 
claimed  by 
claimant. 

47 

France 

French  francs 

3,583,698.63 
90,000.64 
19  374  71 

3 

Spain 

Spanish  pesetas. . . 

1 

Imgland 

Swedish  kroner.   . 

1 

Switzerland 

Swiss  francs 

109;076.76 
952/0/0 

1 

England 

English  pounds 

53 

APPENDIX  XXVI. 

French-Am  KKicAN  Artillery  Under  Stettinius-Loucheur  Arrangement. 

(1)    artillery    components   to   be   delivered   to   FRANCE   BY    THE    UNITED    STATES. 

(a)  75-mm.  material: 

100  roughly  macliined  recuperator  forcings  monthly,  September,  1918, 

to  June,  1919. 
250  assembled  carriages,  without  recuperators  and  without  sights,  prior 

to  December  31,  1918. 
150  assembled   carriages   monthly,  without   recuperators  and   without 

sights,  January  to  June,  1919. 
2,880  carriage  limbers, 

6,000  caissons,  prior  to  December  81,  1918. 

8,640  caisson 'limbers, 
A  total  of  2,640  additional  caissons  from  January  to  June,  1919. 

( b )  155-mm.  Schneider  howitzer  material : 

76  finished  recuperators  during  September,  1918. 

810  finished  recuperators  between  October  1  and  December  31,  1918. 

200  finished  recuperators  between  January  1  and  May  1,  1919. 

622  finished  howitzers  during  September,  1918. 

210  finished  howitzers  between  October  1  and  December  31,  1918. 

300  finished  howitzers  between  January  1  and  May  1,  1919. 

386  finished  limbers  to  December  31,  1918. 

746  finished  carriage  limbers  between  January  1  and  May  1,  1919. 

3,396  caissons  prior  to  December  31,  1918. 


UNITED  STATES  LIQUIDATION   COMMISSION.  151 

(c)   155-mm.  G.  P.  F.  material: 

50  finished  guns  and  carriages  without  recuperators,  prior  to  December 

31,  1918. 
400  rouglily  machined  recuperator  forgings  prior  to  June  30,  1919,  of 

which  60  had  been  floated  prior  to  September  12,  1918;  subsequent 

deliveries  to  be  at  rate  of  40  per  month. 
300  carriage  limbers  prior  to  December  31,  1918. 

(2)     GUNS    TO   KE   DELIVEIKED   BY    FRANCE   TO   THE    UNITED    STATES.  

ill)   75-mm.  guns  complete  with  1  limber  and  1  caisson: 

September 288 

October, 

November,    per  month 300 

December, 

From  ,Iiinuary  1,  1919,  to  June  30,  1919,  per  month 350 

(h)   155-mm.  howitzers: 

To  January  1,  1919,  per  month 140 

From  January  1,  1919,  per  month 160 

(c)  155-mm.  guns: 

October 40 

November 40 

December 45 

From  January  1,  1919,  per  month 45 

(d)  In  addition  the  French  to  deliver  all  the  materials  and  parts  of  materials 

necessary   for  the  maintenance  of  batteries  in  service,  observing  the 
co-efficients  for  maintenance  employed  in  the  French  Army. 


APPENDIX  XXVII. 

(1)   French  Artillery  and  Ammunition  Agreement 
(Aug.  28,  1919). 

Agreement  between  the  Government  of  the  United  States  and  the  Govern- 
ment of  France,  concerning  the  final  settlement  of  the  supplying  of  artillery 
and  ammunition,  undertaken  by  France  on  behalf  of  the  United  States  up 
to  the  date  of  the  armistice  of  November  11th,  1918,  and  other  matters. 

Preamble. — At  the  signature  of  the  armistice  of  November  11th,  1918,  the 
French  Government  had  accepted  orders  for  a  large  amount  of  ammunition  and 
artillery  materiel  to  be  delivered  to  the  United  States  Government,  which 
were  then  in  course  of  execution ;  and  certain  negotiations  had  also  been  en- 
tered into,  relative  to  the  furnishing  oi  certain  additional  artillery  materiel 
for  which  no  final  agreement  had  been  reached  and  for  ivhich  the  United  States 
Government  had  not  yet  placed  formal  orders.  The  United  States  Government, 
on  its  part,  had  supplied  to  the  French  Government  550  155-mm.  howitzers, 
intended  to  be  used  in  the  composition  of  the  materials  to  be  transferred  to 
the  United  States. 

The  French  Government  had  also  agreed  to  machine  for  the  United  States 
400  rough  cradles  for  1.55-mm.  G.  P.  F.  guns,  of  which  110  had  been  delivered 
by  the  United  States  and  60  were  in  process  of  machining  on  November 
11th,  1918. 


152  UNITED  STATES  LIQUIDATION   COMMISSION. 

A  verbal  agreement  (confirmed  by  letters  of  December  7th,  1918,  from  Mr. 
Loucheur,  of  December  7tli,  1918,  from  Mr.  Stettinius,  and  of  December  20th, 
1918,  and  January  3rd,  1919,  from  Col.  Mercier  was  reached  between  the 
Ministre  de  I'Armament,  representing  the  French  Government,  and  Mr. 
Stettinius,  special  representative  of  the  United  States  Government,  concern- 
ing the  final  settlement  of  the  orders  for  artillery  materials  and  ammunition 
undertaken  by  France  on  behalf  of  the  United  States  and  other  matters ;  and 
this  agreement  is  now  drawn  up  in  the  final  form,  as  follows : 

Between  the  United  States  Government,  represented  by  E.  D.  Bricker, 
Colonel,  Ordnance  Department,  United  States,  on  behalf  of  the  Chief  of 
Ordnance  of  the  United  States  Army,  duly  appointed,  and  the  French  Govern- 
ment, represented  by  M.  le  G^n^ral  Maurin,  Directeur  de  I'Artillerie,  duly 
appointed,  is  agreed  as  follows: 

Art  I.  General  provisions. —  (a)  All  materials  and  accessories,  ammunition  or 
ammunition  components,  delivered  by  the  Government  of  France  and  accepted 
by  the  American  Armies  or  delivered  by  the  United  States  Government  and 
accepted  by  the  French  Armies,  up  to  November  11th,  1918,  inclusive,  shall 
remain  the  property  of  the  accepting  Government  and  shall  be  paid  for  at  the 
prices  previously  agreed  to  for  items  of  the  same  model  belonging  to  the 
same  or  previous  orders. 

(&)  Save  the  exceptions  provided  for  in  the  present  covenant  and  excepting 
all  material  delivered  and  accepted  on  or  before  November  11th,  1918 ;  all  orders 
accepted  by  the  French  Government  for  the  United  States  Ordnance  Depart- 
ment covering  artillery  mat6riels,  ammunition,  accessories,  and  spare  parts,  and 
all  orders  for  projectiles  finished  or  unfinished,  placed  for  or  by  the  French 
Government  in  America  with  the  United  States  Ordnance  Department  up  to 
November  11th,  1918,  inclusive,  are  hereby  cancelled  by  mutual  agreement.  No 
indemnity  of  any  kind  whatsoever  shall  be  paid  by  the  United  States  Govern- 
ment or  by  the  French  Government  for  the  cancellation  of  these  orders. 

(c)  All  ammunition  and  ammunition  components  of  American  make,  not 
specified  in  Art.  I,  par.  (a)  above,  existing  in  the  depots  of  French  general 
reserve  storehouses  (Entrepots  de  Reserve  G6n6rale  Francais)  shall  be  removed 
and  put  at  the  disposal  of  the  United  States. 

Likewise  all  ammunition  of  French  make  now  in  the  said  storehouses,  not 
specified  In  Art.  I,  par.  (a)  above,  shall  be  kept  by  the  French  Government. 

^(d)  The  United  States  Government  has  previously  delivered  to  the  French 
Government  550  155-m/m  howitzers  finished  with  breech  mechanism;  275  of 
these  guns  shall  be  satisfactorily  assembled  to  the  carriages  belonging  to  the 
700  mat^rlels  of  this  type  specified  In  Art.  ir,  par.  (b).  In  place  of  the  same 
number  of  similar  howitzers  of  French  manufacture.  Their  value  (reckoned 
at  frs.  23,466  each,  which  Is  the  cost  price  of  Identical  material  of  French 
make),  I.  e.,  a  total  of  frs.  6,453,150,  shall  be  deducted  from  the  total  price  of 
155-m/m  howitzer  mat6rlels  transferred. 

The  other  275  howitzers  remain  the  property  of  the  United  States.  It  is 
stated  by  the  French  Government  that  one  of  these  burst  during  the  regulation 
firing  tests,  because  of  weakness  developed  by  these  tests;  a  report  will  be 
furnished  by  the  French  Government  certifying  to  these  facts.  The  remaining 
274  howitzers  shall  be  delivered  to  the  Ordnance  Department  and  shipped  to 
America  at  the  expense  of  the  United  States  Government. 

(e)  The  United  States  Government  has  delivered  to  the  French  Government 
110  155-m/m  G.  P.  F.  rough  cradle  forglngs,  being  part  of  an  order  for  400 
rough  forgings;  60  of  these  cradles,  being  at  the  present  time  in  course  of 
machining,  shall  be  entirely  completed  by  France  and  delivered  to  the  United 
States.    The  settlement  will  be  the  subject  of  an  agreement  when  the  costs  of 


UNITED  STATES  LIQUIDATION   COMMISSION.  153 

the  service  rendered  shall  have  been  determined ;  the  sum  to  be  paid  shall  be 
tlie  actual  cost  price  to  the  French  Government. 

The  50  rough  forgings  remaining  shall  be  delivered  to  the  Ordnance- Depart- 
ment for  return  to  the  United  States  at  the  expense  of  the  United  States  Govern- 
ment.    The  290  forgings  not  yet  delivered  shall  not  be  shipped  to  France. 

Art.  II.  Materiel  to  be  supplied. — The  French  Government  undertakes  to 
supply  to  the  United  States  Government,  which  accepts  and  undertakes  to  pay 
for  the  following  materiel : 

(a)  944  75-m/m  gun  materiels,  model  1897,  with  limbers. 

(&)  700  155-m/m  howitzer  materiels,  model  1917,  Schneider  design,  with 
limbers. 

(c)  198  155-m/m  G.  P.  F.  materiels,  with  limbers. 

(d)  Collection  of  additional  parts  as  hereinafter  specified. 

Art.  III.  Composition  of  tJie  materiel  to  he  delivered. — The  articles  included 
in  the  composition  of  the  materiels  and  collections  mentioned  in  Art.  II  are 
enumerated  in  the  tables  number  1  to  7,  attached  to  and  forming  a  part  of 
this  contract. 

Art.  IV.  Conditions  of  acceptance  and  delivery. — The  above-mentioned  ma- 
teriels, of  the  types  in  use  in  the  French  Army  and  complying  with  the  regula- 
tion technical  requirements  of  acceptance  provided  for  their  manufacture,  shall 
be  delivered  at  such  places  in  France  as  shall  be  indicated  by  the  chief  ordnance 
officer,  A.  E.  F.,  by  April  1,  1919,  or  at  later  dates,  when  the  United  States 
authorities  are  prepared  to  accept  delivery. 

Art.  V.  Prices  and  conditions  relative  to  same. — The  transfer  prices  of  above- 
mentioned  materiels  (Art.  II)  are  fixed  as  follows: 

Francs, 
(a)  312  75-m/m  materiels  with  limbers,  at  frs.  30,080  the  unit 

(Table  No.  1) 9,384,960 

(ft)  632  75-m/m  gun  materiels  with  limbers,  at  frs.  30,018  the 

unit  (Table  No.  2) 18,971,376 

(c)  236  collections  of  spare  parts  at  frs.  1,875  each  (Table  No.  3)  _        442,  500 

(d)  700  155-m/m  howitzer  materiels  with  limbers,  model  1917, 

at  frs.  89,000  the  unit  (Table  No.  4) 62,300,000 

(e)  198  155-m/m  G.  P.  F.  materiels  with  limbers,  at  frs.  145,850 

the  unit  (Table  No.  5) 28,878,300 

if)   Set  of  additional  articles,  spare  parts,  etc.,   for  155-m/m 

howitzers  (Table  No.  6) 2,  524,  445.  40 

(g)   Sets  of  additional  articles  and  spare  parts,  etc.,  for  155-m/m 

G.  P.  F.  (Table  No.  7) 1,453,456.05 


Total 123,  955,  037.  45 

To  be  deducted,  the  value  of  275  155-m/m  guns    (see  Art.  I, 
par.    id)) 6,453,150 


Total 117,  501,  887.  45 

The  total  value  of  the  transfer  granted  amounts  to  the  sum  of  one  hundred 
seventeen  million  five  hundred  and  one  thousand  eight  hundred  eighty-seven 
francs  forty-five  centimes. 

These  prices  represent,  as  far  as  it  has  been  possible  to  reckon  them,  the 
actual  cost  prices  to  the  French  Government  without  profit. 

They  include  all  royalties  and  premiums  for  the  use  of  patents  or  secret 
processes,  which  may  affect  the  use  of  any  part  of  the  material  transferred. 


154  UNITED  STATES  LIQUIDATION   COMMISSION. 

The  French  Goveriinient  aj^rees  to  protect  the  United  States  against  all  obli- 
gations and  all  claims  for  royalties  or  other  rights  resulting  from  the  use  of 
the  material  transferred  with  the  exception  of  the  following  reservation : 

Whereas  valid  patent  rights  may  exist  concerning  this  material,  rights 
which  have  never  been  published  and  which  are  still  kept  secret  in  virtue  of  the 
stipulations  of  the  law  of  April  12th,  1916;  and  whereas,  furthermore,  legal 
claims  may  be  made  in  the  future;  and  whereas  the  French  Government  may 
be  obliged,  in  order  to  give  satisfaction  to  such  claims,  to  make  payments  which 
will  thus  increase  the  present  cost  price  of  the  transferred  patented  elements ;  it 
is  therefore  agreed  that  if,  subsequent  to  the  signing  of  the  present  covenant, 
the  French  Government  should  be  legally  forced  to  pay,  for  any  part  of  the 
material  transferred  to  the  United  States  by  the  present  covenant,  an  in- 
demnity in  the  form  of  a  royalty  to  the  proprietor  of  a  patent  now  held  secret 
by  virtue  of  the  above-mentioned  law,  the  United  States  will,  in  such  case,  in- 
demnify the  .French  Government  for  the  additional  expenses  by  paying,  in 
addition  to  the  transfer  price,  a  sum,  the  ratio  of  which  to  the  whole  amount 
paid  by  the  French  Government  will  be  equal  to  the  ratio  of  the  number  of 
patented  articles  transferred  to  the  United  States  to  the  whole  numbei-  of  such 
articles  manufactured  by  or  for  the  French  Government. 

These  provisions  apply  only  to  transfers  referred  to  in  the  present  covenant 
and  do  not  modify  any  conditions  or  clauses  to  the  contrary  which  may  have 
been  pr(»vided  for  in  other  covenants  already  made  between  the  Governments. 

Abt.  VI.  Payments. — After  presentation  and  examination  of  the  proper  re- 
ceipts and  vouchers,  the  American  Government  will  make  settlement,  as  to  the 
indebtedness  created  by  this  contract,  in  such  manner  as  shall  be  in  use  for  such 
settlements  between  the  two  Governments  at  the  date  of  the  settlement. 

In  conformity  with  the  American  law  neither  any  member  or  delegate  of  the 
American  Congress,  nor  any  person  belonging  to  or  employed  in  the  military 
services  of  the  United  States  shall  be  admitted  to  any  share  in  this  contract, 
nor  to  obtain  any  pro  tit  from  it. 

In  conformity  with  the  French  law,  the  amount  of  the  transfer  belongs  in 
full  to  the  French  treasury ;  neither  any  commission  nor  any  sum  of  any  kind 
can  be  given,  no  matter  under  what  form,  to  anybody  whomsoever. 

Made  out  in  six  copies,  at  Paris,  on  the  28th  day  of  August,  1919. 

Name  and  capacity  of  the  representative  of  the  French  Government : 

I-..  Maurin. 

Name  and  capacity  of  the  representative  of  the  American  Government : 

E.  D.  Bricker, 
Colonel,  Ordnance  Department,  for  Chief  of  Ordnance, 

War  Department,  United  States  of  America. 

Witness : 

F.  A.  Pattison, 

Major,  Ord.  Dept. 

Approved :        United  States  Liquidation  Com- 
mission— War  Department, 
Edwin  B.  Parker,  Chairman. 


UNITED  STATES  LIQUIDATION   COMMISSION. 


155 


(2)  Supplement  to  French  Artillery  and  Ammunition  Contract   (Dated 

Nov.  20,  1919). 


This  contract,  entered  into  this  20th 
day  of  November,  1919,  by  and  be- 
tween the  United  States  of  America 
(hereinafter  called  "America"),  act- 
ing through  the  United  States  Liqui- 
dation Commission — War  Department, 
Edwin  B.  Parker,  chairman,  of  the  one 
part,  and  the  Republic  of  France  ( here- 
inafter called  "France"),  acting 
through  M.  le  General  Maurin,  direc- 
teur  de  Tartillerie,  of  the  other  part, 
witnesseth : 

That  whereas  on  the  28th  day  of 
August,  1919,  the  parties  hereto  en- 
tered into  an  agreement  "  concerning 
the  final  settlement  of  the  orders  for 
artillery  materials  and  ammunition 
undertaken  by  France  on  behalf  of  the 
United  States  and  other  matters " ; 
and 

Whereas  subdivision  (e)  of  Art.  I 
of  the  said  contract  of  August  28,  1919, 
provides  in  part  as  follows: 

"(e)  The  United  States  Government 
has  delivered  to  the  French  Govern- 
ment 110  155-m/m  G.  P.  F.  rough 
cradle  forgings,  being  part  of  an  order 
for  400  rough  forgings.  Sixty  of  these 
cradles,  being  at  the  present  time  in 
course  of  machining,  shall  be  entirely 
completed  by  France  and  delivered  to 
the  United  States.  The  settlement  will 
I)e  the  subject  of  an  agreement  when 
the  costs  of  the  service  rendered  shall 
hav«  been  determined ;  the  sum  to  be 
paid  shall  be  the.  actual  cost  price  to 
the  French  Government  "  ;  and 

Whereas  the  work  of  machining  the 
said  60  cradles  has  now  been  completed 
by  the  French  Government  and  the  ac- 
tual cost  thereof  is  frs.  861,000 ; 

Now,  therefore,  in  consideration  of 
the  premises,  it  is  agreed  between  the 
parties  hereto  that  America  shall  pay 
to  France  the  said  sum  of  frs.  861,000, 
the  payment  of  which  is  hereby  ad- 
mitted and  acknowledged  by  France  in 
full  and  final  payment  and  settlement 


Ce  contrat.  redige  le  20  Novembre 
1919.  a  ete  etabli  par  et  entre  la  Gou- 
veruement  des  Etats  Unis  (appele  ci- 
apres  "Amerique")  Represente  par  la 
Commission  de  Liquidation  des  Etats- 
Unis  du  Departement.  de  la  Guerre, 
Edwin  B.  Parker,  President,  d'mie_ 
part;  et  la  Republique  Francaise  (ap- 
pelee  ci-apres  "France"),  representee 
par  M.  le  General  Maurin,  Directeur 
de  I'Artillerie,  d'autre  part ; 

Etant  donue  que  le  28  Aout  1919  les 
parties  ont  conclu  un  accord  concer- 
nant  le  reglelnent  final  des  ordres  pour 
le  materiel  d'artillerie,  les  munitions 
et  autres  materiels  entrepris  par  la 
France  pour  le  compte  des  Etats- 
Unis;   et 

Etant  donne  qu'au  paragraphe 
(e)  de  I'Art.  I  du  dit  Contrat  du 
28  Aout  1919  il  est  mentionne  ce  qui 
suit: 

"(e)  Le  Gouvernement  des  Etats- 
Unis  a  delivre  au  Gouvernement  Fran- 
cais  110  ebauches  de  glissieres  pour 
canons  de  155-m/m  G.  P.  F.  faisant 
partie  d'une  commande  de  400 
ebauches.  60  de  ces  glissieres  etant 
actuellement  en  cours  d'usinage  seront 
entierement  finies  par  la  France  et 
livrees  aux  Etats-Unis.  Le  reglement 
fera  I'objet  d'un  accord  lorsque  le  cout 
du  travail  execute  aura  ete  determine ; 
la  somme  a  payer  sera  le  prix  de  re- 
vient  pour  le  Gouvernement  Fran- 
cais ;  "  et 

Etant  donne  que  le  travail  de  fini- 
tion  des  60  glissieres  sus-indiquees  est 
maintenant  complement  termine  par  le 
(Gouvernement  Francais  et  que  le  cout. 
du  travail  s'eleve  a  861,000; 

En  consequence,  etant  donne  ce  qui 
precede,  il  a  ete  convenu  entre  les  par- 
ties sus-indiquees  que  I'Amerique 
paiera  a  la  France  la  dite  somme  de 
861,0CK)  Frs.  Ce  paiement  est  de  ce 
fait  admis  et  reconnu  par  la  France 
comme  reglement  total  et  definitif  de 


156 


UNITED  STATES  LIQUIDATION   COMMISSION, 


of  the  balance  due  France  under  the 
said  subdivision  (e)  of  Art.  I  of  the 
said  contract  of  August  28th,  1919. 

In  witness  whereof,  on  the  day  and 
year  lirst  above  written,  this  contract 
has  been  executed  in  six  parts,  each 
having  the  full  force  and  effect  of  an 
original,  by  the  United  States  of  Amer- 
ica, acting  through  the  United  States 
Liquidation  Commission — War  Depart- 
ment, Edwin  B.  Parker,  chairman, 
and  by  the  Republic  of  France,  acting 
through  M.  le  General  Maurin,  di- 
recteur  de  I'artillerie. 

United  States  of  America, 
By  Edwin  B.  Parker, 

Chairman  United  States 
Lfiquidation  Commission  — 
War  Department. 
Republic  of  France, 
By  L.  Maurin, 

Directeur  de  VArtillerie. 


la  balance  due  a  la  France  aux  termes 
du  dit  paragraphe  (e)  de  I'Art.  I  du 
dit  Contrat  du  28  Aout  1919. 

En  foi  de  quoi,  le  jour  et  I'annee 
precites.  ce  Contrat  a  ete  redige  en  six 
exemplaires,  chacun  d'eux  ayant  la 
meme  valeur  et  effet  qu'un  original, 
par  les  Etats-Unis  d'Amerique,  repre- 
sentes  par  la  Commission  de  Liquida- 
tion des  Etats-Unis.  Departement  de  la 
Guerre,  Edwin  B.  Parker,  President, 
et  par  la  Republique  Francaise,  repre- 
sentee par  M.  le  General  Maurin,  Di- 
recteur de  I'Artillerie. 

Etats-Unis  D'Amerique, 
Par  Edwin  B.  Parker, 
President  de  la  Commission  de  Liqui- 
dation  des  Etats-Unis  du  Departe- 
ment de  la  Guerre. 

Republique  Francaise, 
Par  L.  Maurin, 

Directeur  de  VArtillerie. 


APPENDIX  XXVIII. 

Fbenoh  Aib  Service  Settlement  of  Novembeb  8,  1919. 


Memorandum  of  settlement  between 
the  respective  Air  Services  of  the 
United  States  of  America  and  the  Re- 
public of  France  dated  November  8, 
1919. 

Whereas  in  the  general  settlement 
heretofore  negotiated  between  the  Air 
Service  of  the  War  Department  of  the 
United  States  of  America  (hereinaf- 
ter called  "America")  and  the  Air 
Service  of  the  Republic  of  France 
(hereinafter  called  "France"),  France 
was  entitled  to  receive  some  American 
Liberty  motors  and  spares  of  the  value 
of  sixteen  million  eight  hundred  and 
five  thousand  five  hundred  dollars 
($16,805,500)  which  have  been  retained 
by  America  and  America  was  entitled 
to  receive  airplanes  and  airplane  ma- 
terials of  French  manufacture  of  the 
value  of  ninety-eight  million  three  hun- 
dred forty-four  thousand  and  fourteen 


Memorandum  de  Reglement  entre  les 
Services  A6ronautiques  .  respectif s  des 
Etats-Unis  d'Amerique  et  la  Republique 
Francaise  en  date  du  8  Novembre  1919. 

Etant  donne  que  dans  le  reglement 
general  en  discussion  jusqu'a  ce  jour 
entre  I'Air  Service  du  War  Departe- 
ment des  Etats-Unis  d'Amerique  (ci- 
apr6s  d6nomm6  "Amerique")  et  la  Di- 
rection de  I'A^ronautique  de  la  Repu- 
blique Francaise  (ci-apr^s  d4nomm6e 
"France"),  la  France  6tait  en  droit 
de  recevoir  des  moteurs  Liberty  et 
pieces  de  rechange  d'une  valeur  de 
seize  millions  huit  cent  cinq  mille  cinq 
cents  (16,805,500)  dollars  qui  ont  6t6 
retenus  par  1' Amerique  et  que  1' Ameri- 
que etait  en  droit  de  recevoir  des  avions 
et  du  materiel  aSronautique  provenant 
des  usines  francaises  d'une  valeur  de 
quatre   vingt   dix   huit   millions   trois 


UNITED  STATES  LIQUIDATION   COMMISSION. 


157 


(frs.    98,344,014)    francs    which    have 
been  retained  by  France. 

Now,  therefore,  it  is  agreed : 

That  America  shall  retain  the  Lib- 
erty motors  and  spares  above  men- 
tioned of  the  value  of  sixteen  million 
eight  hundred  and  five  thousand 
five  hundred  ($16,805,500)  dollars,  the 
French  bills  for  which  against  America, 
stated  in  dollars  and  converted  into 
francs  at  the  rate  of  5.8523  francs  for 
one  dollar,  aggregate  in  amount 
ninety-eight  million  three  hundred  fifty 
thousand  eight  hundred  and  twenty- 
seven  francs    (98,350,827  frs.). 

That  France  shall  retain  the  air- 
planes and  airplane  materials  of  French 
manufacture  above  mentioned  of  the 
value  of  ninety-eight  million  three 
hundred  forty-four  thousand  and  four- 
teen (98,344,014)  francs. 

It  is  further  agreed  that  said  bills 
of  America  against  France,  when  so 
converted,  shall  be  offset  against  said 
bills  of  France  against  America  leav- 
ing a  balance  due  France  of  six  thou- 
sand eight  hundred  thirteen  frs. 
(6,813),  for  which  amount  France  shall 
receive  credit  in  the  settlement  of  ac- 
counts between  America  and  France 
whereupon  the  said  bills  of  America 
against  France  and  the  said  bills  of 
France  against  America  shall  be  can- 
celled as  fully  satisfied. 

Attached  hereto  and  marked  for  iden- 
tification "  Exhibit  A"  is  the  final  state- 
ment of  account  between  the  United 
States  of  America  and  the  Republic  of 
France  in  connection  with  the  general 
settlement  for  airplanes  and  motors 
from  which  it  appears  (a)  that  the 
total  credit  due  America  by  France  is 
twenty-one  million  two  hundred  sev- 
enty-tw^o  thousand  two  hundred  fifty 
dollars  (.$21,272,250)  and  (b)  the  total 
credit  due  by  America  is  one  hundred 
sixty-seven  million  seven  hundred 
eigthy  thousand  sixty -six  (167,780,066) 
francs  plus  one  million  eight  hundred 


cent  quarante  quatre  mille  quatorze 
(98,344,014)  francs  qui  ont  et6  retenus 
par  la  France. 

II  est  en  consequence  aujourd'hui 
entendu : 

(1)  Que  I'Amerique  retiendra  les 
moteurs  Liberty  et  pieces  de  rechange 
ci-dessus  mentionn^s  d'une  valeur  de 
seize  millions  huit/cent  cinq  mille  cinq 
cents  (16,805,500)  dollars  dont  Jes_ 
factures  francaises  sur  I'Amerique 
etablies  en  dollars  et  converties  en 
francs  au  taux  de  5.8523  francs  pour 
un  dollar  s'61§vent  a  un  total  de  quatre 
vingt  dix  huit  millions  trois  cents 
einquante  mille  huit  cent  vingt  sept 
(98,350,827)  francs. 

(2)  Que  la  France  retiendra  les 
avions  et  le  materiel  aeronautique  pro- 
venant  des  usines  francaises  ci-dessus 
mentionnees  d'une  valeur  de  quatre 
vingt  dix  huit  millions  trois  cent 
quarante  quatre  mille  quatorze  (98,- 
344,014)  francs. 

(3)  II  est  de  plus  entendu  que  les 
dites  factures  de  I'Amerique  sur  la 
France,  apr§s  cete  conversion,  seront 
balancges  avec  les  dites  factures  de  la 
France  sur  I'Amerique  laissant  un 
produit  dQ  k  la  France  de  six  mille  huit 
cent  treize  (6,813)  francs,  somme  pour 
laquelle  la  France  sera  credit6e  sans 
le  r&glement  de  comptes  entre  I'Ameri- 
que et  la  France  sur  quoi  les  dites 
factures  de  I'Amerique  sur  la  France  et 
de  la  France  sur  I'Amerique  seront 
annuiees  comme  compietement  regimes. 

(4)  Ci- joint  et  intitule  "  Tableau  A  " 
se  trouve  I'etat  final  de  compte  entre 
les  Etats-Unis  d'Am6rique  et  la  R6pu- 
blique  Francaise  se  relatif  aux  r^gle- 
ments  des  avions  et  moteurs  duquel 
etat  il  appert  (a)  que  la  somme  totale 
due  a  I'Amerique  par  la  France  est  de 
ving  et  un  millions  deux  cent  soixante 
douze  mille  deux  cent  einquante 
(21,272,250)  dollars,  et  (b)  que  la 
somme  totale  due  a  la  France  par 
I'Amerique  est  de  cent  soixante  sept 
millions  sept  cent  quatre  vingt  mille 
soixante  six  (167,780,066)  frs.  plus  un 
million    huit    cent   quatre   vingt   neuf 


158 


UNITED  STATES  LIQUIDATION   COMMISSION. 


eigrhty-nine  thousand  four  hundred  and 
three  and  60/100  ($1,889,403.60)  dol- 
lars. 

It  is  agreed  by  both  parties  hereto 
that  tlie  said  statement  is  correct  and 
shall  form  the  basis  of  stating  a  final 
account  in  the  general  settlement  now 
being  negotiated  between  France  and 
America,  so  far  as  concerns  the  Air 
Service  transactions  between  France 
and  America  here  referred  to. 

United  States  of  America, 
By  Edwin  B.  Parkeb, 
Chairman,  United  States  Liquida- 
tion Vommissimi — ^Var  Department. 


mille    quatre     cent     trois    dollars    et 
soixante  cents    (1,889,403.60  dollars). 

U  est  entendu  entre  les  deux  parties 
en  cause  que  ledit  6tat  est  correct  et 
sera  la  base  de  retablissemeut  du 
compte  final  dans  le  reglement  g6n6ral 
actuellement  en  cours  de  n6gociation 
ent^-e  la  France  et  I'Amerique  en  ce  qui 
regarde  les  transactions  susvis6es  entre 
les  Services  Aeronalitiques  Francals  et 
Americains. 

R^publique  Francaise, 

Approuv6  le  10  Novembre  1919. 

Le  President  du  Conseil  Ministre  de 
la  Guerre. 

Direction  de  I'A^ronautique: 

(Signed)  M.  Duval. 


"Exhibit  A." — United  States  Liquidation  Commission — War  Department. 

Statement  of  account  betirecn  the  United  States  of  America  and  the  Republic 
of  France  in  connectimi  with  genei'al  settlcnwnt  for  airplanes  and  motms. 


Amount  in 
francs. 


Amount  in 
dollars. 


Charges  against  France: 

Liberty  motors  and  spare  parts,  Cuthell  agreement  of  May  29, 1919 . 


Total  credit  due  United  States  from  France. 


Credits  due  France: 

Airplanes  and  motors  in  process  of  construction  at  date        Francs. 

of  armistice 120,  &59, 4.50. 00 

Cancellation  indemnities  for  airplanes  and  motors 14, 710, 5.S7. 00 

Spare  parts  in  process  of  construction 19, 962, 5.5.3. 00 

Cancellation  indemnity  for  spares 8, 225, 004. 00 


Total 163,757,544.00 


Miscellaneous  mat^xiel  in  process  of  manufacture 

Cancellation  indemnities  account  of  miscellaneous  materiel 


3,496,628.00 
413,589.00 


105,492.00 


Total .3, 910, 217. 00 

Cost  of  delivery  by  aerial  route  of  596  airplanes  @  fr.  177.00 
each 

Credit  due  France  under  exchange  of  Liberty  motors  for 

French  airplanes  and  mat^el 

Payments  made  on  account  of  motors  and  spares  that  were 
not  credited  against  charge  of  $21,272,250.00  included  in 
Cuthell  agreement: 

April,  1919,  frs.    9,641,406.26®  5.80 $1,662,311.43 

May,    1919,  frs.    1,349,347.12  @  6.05 223,032.58 

July,    1919,  frs.        26,184.37'    "    "  


6.45. 
frs.  11,016,937.75 
Total  credit  due  France  from  the  United  States . 


4,059. 


163,757,544.00 


3,910,217.00 

105,492.00 
6,813.00 


21,272,250.00 


21,272.250  00 


1,889,403.60 


167,780,066.00 


1,889,403.60 


UNITED   STATES  LIQUIDATION   COMMISSION. 


159 


"  Tableau  A." — Commission  de  Liquidation  Americain6 — War  Department. 

Etat  du  compte  entre  les  Etats-TJnis  d'Amerique  et  la  RepuUique  Francaise 
relatif  au  reglement  general  pour  les  avions  et  moteurs. 


Montant  en 
francs. 


Montant  en 
dollars. 


Dette  de  la  France: 

Moteurs  Liberty  et  pieces  de  rechanges,  accord  Cuthell  du  29  mai  1919. 

Cr^iit  total  d<i  par  la  France  aux  Etats-Unis 

Sommes  dues  a  la  France: 

Avions  et  moteurs  en  cours  de  construction  a  la  date  Francs. 

de  r  armistice 120, 859,450.00 

Indemnite  de  resiliation  pour  avions  et  moteurs 14, 710, 537. 00 

Pieces  de  rechanges  en  cours  de  construction 19, 982, 553. 00 

Indemnity  de  resiliation  pour  les  pieces  de  rechanges . .  8, 225, 004. 00 


Total 163, 757, 544. 00 

Materiel  divers  en  cours  de  fabrication 3, 496,. 628. 00 

Irtdemnite  de  resiliation  pour  le  materiel  divers 413, 589. 00 


Total 3, 910, 217. 00 

Co<lt  de  la  livraison  par  voie  de  I'air  de  596  avions:  177 

francs  pour  chacun 105, 492. 00 

Somme  due  k  la  France  en  vertu  de  1  'ecbange  de  moteurs 

Liberty  contre  du  materiel  aeronautique  frangais 

Paiements  effectues  sur  le  compte  moteurs  Liberty  et 

pieces  de  rechangc  qui  n'ont  pas  6te  d6duits    du 

prix  total  de  21,272,250  dollars  inclus  dans  I'accord 

Cuthell: 

Avril  1919,   frs.  9, 641, 406.  26  au  taux  de  5. 80. . 

Mai     1919,    frs.  1,349,317. 12  au  taux  de  6.05... 

Juil.    1919,    frs.       26, 184. 37  au  taux  de  6.45... 

frs.  11,016,937.75 

Somme  totale  due  k  la  France  par  les  Etats-Unis. 


$1,662,311.43 

223, 032.  58 

4,059.59 


1,889,403.60 


16.3,757,544.00 

3,910,217.00 

105, 492.  00 

6, 813.  00 


167,780,066.00 


21,  272, 250. 00 


21,272,250,00 


1,889,403.60 
1,889,403.60 


APPENDIX  XXIX. 

Contract  Between  United  States  of  America  and  Republic  of  France  for  the 
Settlement  of  Railroad  Transportation  and  Other  Claims,  October  1, 1919. 


This  contract  entered  into  tliis  first 
day  of  October,  A.  D.  1919,  by  and  be- 
tween tlie  United  States  of  America 
(hereinafter  called  America),  acting 
through  the  United  States  Liquidation 
Commission — War  Department,  of  the 
one  part ;  and  the  Republic  of  France 
(hereinafter  called  France),  acting 
through  le  Ministre  des  Travaux  Pub- 
lics des  Transports  et  de  la  Marine 
Marchande,  of  the  other  part;  Wit- 
nesseth : 


Entre  les  Etats-Unis  d'Amerique  (ci- 
apr6s  dSnommes  Amerique),  repr6- 
sent^s  par  la  Commission  de  Liquida- 
tion des  Etats-Unis — War  Department 
d'une  part ;  et  la  R4publique  Francaise 
(cj-apr4s  denomm^e  France),  repre- 
sentee par  Monsieur  la  Ministre  des 
Travaux  Publics  des  Transports  et  de 
la  Marine  Marchande  d'autre  part;  la 
Convention  suivante  a  et6  passee  k  la 
date  du  1°  Octobre,  1919; 


Recitals. 


Expose. 


That  whereas  America  upon  its  en- 
try into  the  war  on  April  6th,  1917, 
aranged  with  France  to  provide  and 
to  cause  the  French  railroads  to  pro- 
vide, during  the  presence  in  France  of 


Etant  donne  que  TAmgrique,  au 
moment  de  son  entree  en  guerre  le  6 
Avril  1917,  a  convenu  avec  la  France 
que  celle-ci  pourvoierait  ou  ferait 
pourvoir    par    les    Reseaux    Francais, 


160 


UNITED  STATES  LIQUIDATION   COMMISSION. 


the  American  forces,  transportation 
for  tlie  personnel,  animals,  and  freight 
of  said  forces  at  rates  not  to  exceed 
those  to  be  paid  by  France  for  similar 
services;  and  France  has  provided  or 
caused  to  be  provided  said  transporta- 
tion; and 

Whereas  in  connection  with  rail- 
road transportation  in  France  the  re- 
spective parties  and  the  French  rail- 
roads furnished  or  caused  to  be  fur- 
nished to  one  another  the  use  of  cer- 
tain terminal  facilities  at  docks  and 
elsewhere,  also  locomotives,  cars,  ma- 
chine shop  and  other  equipment,  the 
services  of  certain  personnel,  and  they 
provided  to  one  another  certain  sup- 
plies and  materials,  and  performed  for 
one  another  certain  services,  the  com- 
pensation for  which  remains  to  be  set- 
tled and  adjusted;  and 

Whereas  there  exist  various  claims 
in  France  by  eaeh  of  the  parties 
against  the  other,  and  by  the  French 
railroads  against  America  and  by 
America  against  the  French  railroads, 
arising  out  of  losses  of  or  damages  to 
freight  and  damages  to  railway  prop- 
erty ;  and 


Whereas  the  parties  desire  to  ad- 
just any  and  all  claims  and  demands 
of  every  kind,  nature,  and  description 
whatsoever  of  France  or  of  the  French 
railroads  against  America,  and  any 
and  all  claims  of  every  kind,  nature, 
and  description  whatsoever  of  Amer- 
ica against  France  or  against  .the 
French  railroads  arising  out  of  the 
transactions  referred  to  in  the  fore- 
going recitals,  and  all  claims  of  the 
French  Navigation  Office,  up  to  and  in- 
cluding September  30,  1919 ;  and 

Whereas  the  parties  desire  to  re- 
adjust said  arrangement  entered  into 
upon  America's  entry  into  the  war  for 
the  transportation  over  the  French  rail- 
roads of  the  personnel,   animals,   and 


pendant  la  presence  des  troupes  Am6r^- 
caines,  aux  transports  de  personnel, 
animaux  et  materiel  des  dites  forces  k 
des  tarifs  ne  devant  pas  exc6der  ceux 
payes  par  la  France  pour  des  services 
semblables.  Etant  donn4  que  la 
France  a  pourvu  aux  transports  sus- 
vis^s, 

Vu  que,  en  ce  qui  concerne  les  trans- 
ports sur  les  R6seaux  Francais,  les  par- 
ties respectives  et  les  R^seaux  Fran- 
cais ont  fourni,  ou  fait  fournir  les 
uns  aux  autres  I'usage  de  certaines 
installations,  soit  aux  ports,  soit  en 
d'autres  points  des  dits  Reseaux,  de 
locomotives,  wagons,  ateliers  et  autres 
mat^riels,  ainsi  que  les  services  de  cer- 
tains personnels;  qu'ils  se  sont  fouc- 
uis  reciproquement  certains  ravitaille- 
ments  et  mat4riels,  et  se  sont  rendus 
nmtuellement  certains  services  dont  la 
compensation  reste  a  6tablir  et  a  liqui- 
der; 

Etant  donn6,  qu'il  existe  des  recla- 
mations diverses  en  France  de  chacune 
des  parties  contre  I'autre,  et  des  R6- 
seaux  Francais  contre  I'Amerique,  et 
de  I'Amerique  contre  les  R6seaux 
Francais,  reclamation  dues  k  des 
pertes  ou  a  des  dommages  au  materiel 
*^ransport4  et  a  des  dommages  k  despro- 
pri6t6s  des  dits  R6seaux  de  Chemin  de 
Fer; 

Etant  donn6  que  les  parties  d^sirent 
r^gler  chacune  et  toutes  reclamations 
de  tout  esp6ce,  nature  et  genre,  de 
France  ou  des  Reseaux  Francais  contre 
I'Amerique  et  toutes  reclamations  de 
toute  espece,  nature  et  genre  de 
I'Amerique  contre  la  France  ou  les  Re- 
seaux Francais,  reclamations  relatives 
aux  questions  exposees  dans  les  Ar- 
ticles suivants,  et  toutes  reclamations 
de  I'Office  Francais  de  la  Navigation, 
toutes  ces  reclamations  concernant  la 
periode  s'etendant  jusqu'au  30  Sep- 
tembre,  1919,  inclus ; 

Etant  donne  que  les  parties  desirent 
remettre  au  point  I'arrangement  con- 
clu  au  moment  de  I'entree  en  guerre 
de  I'Amerique  pour  le  transport  sur  les 
Reseaux   Francais   du  personnel,   ani- 


UNITED  STATES  LIQUIDATION   COMMISSION. 


161 


freight  of  tlie American  forces,  in  so  far 
as  it  covers  the  period  on  and  after 
October  1,  1919,  until  December  31, 
1919,  inclusive: 

Now,  therefore,  in  consideration  ot 
the  premises  and  for  tlie  otlier  consid- 
erations herein  stated,  it  is  agreed  as 
follows : 

Article  One.  Agreement. — America 
will  pay  to  France  the  sum  of  four 
Inmdred  and  thirty-four  million,  nine 
liundred  and  eighty-five  thousand 
three  hundred  and  eighty-nine  and 
73/lf)0  (434.985,389.73)   francs. 

Akticle  Two.  America  waives  any 
and  all  claims  which  it  may  or  might 
have  against  France  on  account  of  or 
arising  from  any  and  all  of  the  trans- 
actions referred  to  in  the  recitals  of 
this  contract  up  to  and  including  Sep- 
tember 30,  1919. 

Article  Three.  America  assigns  to 
P^rance  any  and  all  claims  which 
America  may  or  might  have  against 
the  French  railroads  on  account  of  or 
arising  from  any  and  all  of  the  trans- 
actions referred  to  in  the  recitals  of 
this  contract  up  to  and  including  Sep- 
tember 30th,  1919,  and  will,  accord- 
ingly, hand  to  France  sucli  statements 
of  account  as  may  permit  France  to 
make  such  claims  against  the  French 
railroads. 

Article  Four.  France  waives  and 
will  save  America  harmless  from  any 
and  all  claims  which  France  or  the 
French  railroads  may  or  might  have 
against  America  on  account  of  or  aris- 
ing from  any  and  all  of  the  transac- 
tions referred  to  in  the  recitals  of  this 
contract,  and  all  claims  of  the  French 
Navigation  Office,  up  to  and  including 
September  30,  1919. 


Article  Five.  On  and  after  October- 
1,  1919,  and  until  December  31,  1919, 
France  will  furnish  or  cause  the 
French  railroads  to  furnish  transpor- 
tation over  the  French  railroads  for 
the  personnel,  animals,  and  freight 
of  said  forces  at  the  same  rates  at 
188176—20 11 


maux  et  materiel  des  Forces  Aineri- 
caiiies,  en  tant  qu'il  couvre  la  p6riode 
s'6tendant  du  V  Octobre  1919,  inclus, 
an  31  Decembre  1919,  inclus. 

La  convention  suivante  a  §te  agree 
d'un  commun  accord  eu  6gard  aux  con- 
siderations ci-dessus  et  ci-apr6s  ex- 
posees : 

Article  I.  Accord.— L'Am^rique  re- 
connait  devoir  a  la  France  la  somme-de 
quatre  cent  trente-quatre  millions,  neuf 
cent  quatre-vingt  cinq  mille,  trois  cent 
quatre-vingt  neuf  francs,  73  centimes 
(434,985,389.73). 

Article  II. — L'Amerique  renonce  ^ 
chacune  et  toutes  reclamations  qu'elle 
a,  ou  pourrait  avoir  contre  la  France, 
causees  par  ou  provenant  de  cliacune 
et  toutes  les  questions  mentionn^es 
dans  la  teneur  de  la  presente  conven- 
tion jusqu'au  30  Septembre  1919  inclus. 

Article  III. — L'Amerique  transf^re 
a  la  France  tons  les  droits  sans  excep- 
tion qu'elle  pent  ou  pourrait  avoir 
contre  les  Reseaux  Francais  a  cause 
ou  du  fait  d'une  ou  quelconque  des 
questions  mentionn§es  dans  I'expose  de 
la  presente  convention  jusque  et  y 
compris  le  30  Septembre  1919,  et  remet- 
tra  en  consequence  H  la  France  les 
pieces  de  comptabilite  qui  lui  per- 
mettent  de  formuler  des  declamations 
contre  les  Reseaux  Francais. 

Article  IV. — La  France  renonce  a 
et  decharge  I'Amerique  de,  chacune  et 
toutes  reclamations  que  la  France  ou 
les  Reseaux  Francais  ont  ou  auraient 
contre  I'Amerique  &  cause,  ou  du  fait 
de  chacune  et  toutes  questions  men- 
tionnees  dans  I'expose  de  la  presente 
convention,  ainsi  que  les  reclamations 
de  rOffice  Francais  de  la  Navigation, 
toutes  ces  reclamations  pour  la  pe- 
riode  s'etendant  jusqu'au  30  Septembre, 
1919  inclus. 

Article  V. — ^A  partir  du  1  er  Octobr,^ 
1919  et  jusqu'au  31  Decembre  1919,  la 
France  assurera  le  transport  snr  le 
reseau  ferre  francais  du  personnel, 
animaux  et  marchandises  des  Forces 
Americaines  au  meme  tarif  et  sous  les 
memes  conditions  qui  seront  appliques 


162 


UNITED  STATES  LIQUIDATION   COMMISSION. 


which  and' on  the  same  terms  and  con- 
siderations under  which  said  railroads 
shall,  during  the  same  period,  furnish 
transportation  for  the  personnel,  ani- 
mals and  freight  of  the  French  Army. 
In  witness  whereof,  on  the  day  and 
year  first  above  written,  this  contract 
has  been  executed  in  four  parts,  each 
1  laving  the  full  force  and  effect  of  an 
original,  by  the  United  States  of 
America,  acting  through  the  United 
States  Liquidation  Commission — War 
Department,  Edwin  B.  Parker,  chair- 
man ;  and  by  the  Republic  of  France, 
acting  through  le  Ministre  des  Tra- 
vaux  Publics,  des  Transports  et  de  la 
Marine  Marchande. 

United  States  of  America, 
H.V  Edwin  B.  Parker, 

Chairman,  United  States 
Liquidation  Commission  — 
War  Department. 
Repurlic  of  France, 
By  A.  Claveille, 
Ministre  des  Travaux, 
Publics  des  Trunsports  et 
de  la  Marine  Marchande. 

1  October,  1919. 
M.   le   Ministre  des  Travaux   Publics 

des    Transports    et    de    la    Marine 

Marchande,  Paris. 

It  is  understood  that  the  term 
■*  American  forces  "  as  used  in  the  con- 
tract between  America  and  France 
dated  October  1,  1919,  for  the  settle- 
ment of  transportation  matters,  up  to 
and  including  September  30,  1919,  in- 
cludes the  American  land  and  naval 
forces  and  all  affiliated  organizations 
(like  the  Y.  M.  C.  A.,  American  Red 
Cross,  Salvation  Army,  Jewish  Wel- 
fare League,  etc.)  and  that  this  settle- 
ment covers  all  claims  arising  out  of 
transportation  furnished  on  Ordres  de 
Transport  issued  by  American  author- 
ity ;  but,  in  waiving  the  claims  referred 
to  in  Article  Two  of  said  contract 
America  does  not  undertake  to  waive 
any  claims  which  the  American  Red 
Cross  may  have  arising  out  of  trans- 
portation furnished  to  it  on  Ordres  de 
Tranc:port  issued  by  the  French  Army, 
^.ut  only  chiinis  arisin/x  out  of  trans- 


pendant   la   meme  periode  aux  trans- 
ports militaires  francais. 


En  foi  de  quoi,  le  jour  et  I'annes  ci- 
dessus,   la   presente   convention   a   et^ 
faite   en   quatre   expeditions,   chacune 
ayant  la  valeur  et  I'effet  d'un  original, 
par  les  Etats-Unis  d'Amerique  agissant 
par  I'interm^diaire  de  la  Commission  de 
Liquidation  des  Etats-Unis,  Ministere 
de  la  Guerre,  Edwin  B.  Parker,  presi- 
dent ;  et  par  la  Republique  Francaise, 
agissant  par  I'intermediaire  du  Minis- 
tre  des  Travaux   Publics   des   Trans- 
ports et  de  la  Marine  Marchande. 
IiItats-Unis  d'Amerique, 
Par  P:dwin  B.  Parker, 
Le  President  de  la  Commission  de 

Liquidation  des  Etats-Unis,  Minis- 

t^re  de  la  Ouerre. 

Republique  Francaise, 
Par  A.  Claveille, 
Le     Ministre    des     Travaux    Publics 

des   Transports   et   de   la   Mariiie 

Marchande. 

1"  OCTOBRE  1919. 

M<msieur  le  Ministre  des  Travaux 
Publics  des  Transports  et  de  la 
Marine  Marchande,  Paris. 
U  est  entendu  que  le  terme  "  Forces 
Americaines,"  tel  qu'il  est  employe 
dans  la  convention  entre  I'Amerique  et 
la  France  en  date  due  l®""  Octobre 
1919,  pour  le  r^glement  des  affaires 
de  transport  jusqu'au  30  Septembre 
1919  inclus,  comprend  les  Forces 
Americaines  de  terre  et  de  mer  et 
toutes  les  organisations  aliiliees  (comme 
le  Y.  M.  C.  A.,  la  Croix-Rouge  Am^ri- 
caine,  TArmee  du  Salut,  le  Welfare 
League  Israelite,  etc.)  et  que  ce  r^gle- 
ment  couvre  toutes  reclamations  cau- 
sees  par  les  transports  fournis  sur  or- 
dre  de  transport  etablis  par  I'Autorit^ 
Am^ricaine;  mais  en  ecartant  les 
reclamations  dont  il  est  question  dans 
I'artide  II  dudit  contrat,  TAmerique 
n'entreprend  pas  d'ecarter  les  reclama- 
tions que  la  Croix  Rouge  Am^ricaine 
aurait  k  formuler  en  raison  de  trans- 
ports  k   elle;   fournis   sur   ordres   de 


UNITED  STATES  LIQUIDATION   COMMISSION. 


16a 


portation  under  Ordres  de  Transport 
issued  by  the  A.  E.  F. 


(Signed)     Edwin  B.  Parker, 

Chairman,  U.  S.  Liquidation 
Commission — Vt\ir   Department. 

Acrc^pted:   Paris,  1  October,  1919. 
(Signed)     A.   Claveille, 
Le  Ministre  des  Travaux 
Puhlics   des   Transports 
et  dc  hi  Marine  Marchande. 


transport    etablis   par    I'Armee    Fran- 
caise,  mais  seiilement  les  reclamations 
causees  par  les  transports  par  ordres 
de  transport  etablis  par  I'A.  E.  F. 
(Signed)  Edwin  B.  Parker, 

President,     Commission     de     Liquida- 
tion TJ.  S.,  Ministere  de  la  Guerre, 

Accepte:  Paris,  1"  Octobre  1919. 
(Signe)  A.  Olaveille, 

Le     Ministre     des     Travaux     PiJ&Zttjt- 
des   Transports   et   de    la   Marine 
Marchande. 


APPENDIX  XXX. 

Contract  Between  United  States  of  America  and  Republic  of  France* 
October  1,  1919 — Port  Dues  Settlement. 


This  contract,  entered  into  this  first 
day  of  October,  A.  D.  1919,  by  and  be- 
tween the  United  States  of  America 
(hereinafter  called  America),  acting 
through  the  United  States  Liquidation 
Commission — War  Department,  of  the 
one  part;  and  the  Republic  of  France 
(hereinafter  called  France),  acting 
through  le  Ministre  des  Travaux  Pub- 
lics des  Transports  et  de  la  Marinb 
^Merchande.  of  the  other  part;  wit- 
nesseth : 

Recitals. 

That  irlicrcas,  vessels  operating  in 
the  service  of  or  transporting  persons 
or  property  for  America  have,  under 
an  arrangement  entered  into  between 
France  and  the  American  Expedition- 
ary Forces,  used  the  ports  of  France 
since  America's  entry  into  the  war  on 
April  6th.  1917,  and  will  use  said  ports 
until  the  total  evacuation  of  France 
by  the  American  Forces ;  and 

Whercax.  claims  have  been  and  are 
being  made  in  connection  with  the  use 
of  said  ports  by  said  vessels,  espe- 
fi;illy  0)1  account  of  the  nonpayment  of 
j'crt  dues  (tfixe  de  p^age),  and  on  ac- 
count of  tlie  expenses  incurred  in  rais- 
ing the  water  level  at  St.  Nazaire;  and 

Vi'hcrea-'-',  tlie  parties  desire  to  settle 
and  adjust  all  of  said  claims  of  every 
nature  whatsoever  now  existing:  and  to 


Entre  le  Gouvernement  des  Etats- 
Unis  d'Amerique  (ci-apres  denommes 
Amerique)  represente  par  la  Commis- 
sion de  Liquidation  du  Departement  de 
la  Guerre  d.es  Etats-Unis  d'une  part, 
et  le  Gouvernement  de  la  Republique 
Frangaise  (ci-apres  denommee  France) 
represente  par  M.  le  Ministre  des; 
Travaux  Publics  des  Transports  et  de 
la  Marine  Marchande  d'autre  part,  il  a 
ete  conclu,  a  la  date  du  1  Octobre^ 
1919,  le  contrat  suivant: 

Expose. 

Etant  donne  que  les  navires,  an 
service  de  1' Amerique,  ou  transportant 
du  personnel  ou  des  marchandises  pour 
son  compte,  d'apres  une  convention 
etablie  entre  la  France  et  les  Forces 
Expeditionnaires  Americaines,  ont  uti- 
lise les  ports  frangais  depuis  I'entree 
en  guerre  de  I'Amerique,  le  6  Avril 
1917,  et  les  utiliseront  encore  jusqu'a 
I'evacuation  totale  de  la  France  par  les 
Forces  Americaines, 

Etant  donne  que  des  reclamations 
ont  ete  faites  et  le  sont  encore,  au 
sujet  de  I'usage  des  dits  ports  par  les 
dits  navires,  particulierement  a  cause 
du  non  paiement  des  taxes  de  peage 
et  au  sujet  des  depenses  occasionnees 
par  le  relevement  du  plan  d'eau  de  St. 
Nazaire. 

Etant  donne  que  les  hautes  parties 
contractantes  desirant  determiner  et 
liquider  toutes  les  reclamations  telles 


164 


UNITED  STATES  LIQUIDATION  COMMISSION. 


readjust  said  arrangement  in  so  far  as 
it  concerns  the  period  from  tlie  pres- 
ent date  until  the  total  evacuation  of 
France  by  the  American  Forces; 


Now,  therefore,  in  consideration  of 
the  premises  and  for  the  other  consid- 
erations herein  stated,  it  is  agreed  as 
follows : 

Article  One.  Agreement. — America 
will  pay  to  France  the  sum  of  three  mil- 
lion (3,000,000)  francs. 

Article  Two.  France  waives  and 
will  save  America  and  said  vessels, 
their  owners,  charterers  or  masters, 
harmless  from  any  jind  all  claims  which 
France,  or  the  chambers  of  commerce, 
•or  the  municipalities  of  said  ports,  or 
;any  one  whosoever,  may  have,  on  ac- 
Cfount  of  the  use  of  said  ports  by  said 
vessels,  from  the  entry  of  America  into 
the  War  until  the  date  hereof,  for  port 
dues  ( taxe  de  p6age) ,  or  for  expenses  in 
raising  the  water  level  at  St.  Nazaire 
or  elsewhere,  or  for  any  other  port 
facility  or  service  afforded  to  said  ves- 
sels, save  only  the  special  charges  for 
pilotage,  for  the  occupation  of  hangars, 
for  the  use  of  cranes,  and  for  similar 
special  facilities  and  services  (herein- 
after designated  "special  services") 
for  which  America  has  been  paying 
currently  and  will  continue  to  pay 
when  and  as  rendered. 


Article  Three.  France  agrees  that 
such  vessels  may,  from  the  present  date 
until  the  total  evacuation  of  France 
by  the  American  forces,  use  said  ports 
without  paying  for  said  use  during 
said  period  any  of  said  port  dues  ( taxe 
de  peage),  and  without  paying  any  of 
the  expenses  for  raising  the  water  level 
at  St.  Nazaire  or  elsewhere,  and  with- 
out paying  for  any  other  port  facility 
or  service  afforded  to  such  vessels 
(save  only  said  special  services),  and 
will  save  America  and  such  vessels, 
their  owners,  charterers,  and  masters, 


qu'elles  existent  a  I'heure  actuelle  et 
incorporer  dans  la  presente  convention 
toutes  celles  qui  s'appliquent  a  la  pe- 
riode  s'etendaut  depuis  ce  jour  jusqu'a 
Tevacuation  totale  de  la  France  par 
les  Forces  Americaines ; 

La  convention  suivante  a  ete  passee, 
par  applications  des  considerations  ci- 
(lessus  et  suivant  les  dispositions  con- 
tenues  dans  le  present  document : 

Article  1.  Accord. — I'A  m  e  r  i  q  u  e 
paiera  a  la  France  la  somme  de  trois 
million  de  francs  (3,000,000). 

Article  11.  La  France  exonore 
I'Amerique  et  les  dits  navires,  ainsi 
que  leurs  proprietaires,  locataires  ou 
capitaines,  de  toutes  les  reclanuitions 
que  le  Gouvernement  Francais,  ou  les 
chambres  de  connnerce,  ou  les  nmni- 
cipalites  des  dits  ports,  ou  n'importe 
quelles  autres  autorites,  peuvent  faire 
valoir,  au  sujet  de  I'usage  des  dits 
ports  par  les  dits  navires,  depuis  Ten- 
tree  en  guerre  de  I'Amerique  jusqu'a  la 
date  ci-dessus  indiquee  soit  pour  des 
taxes  de  peage  ou  des  dei)enses  oc- 
casionnees  par  le  relevement  du  i)lan 
d'eau  de  Saiut-Nazaire  ou  autres  ports, 
soit  pour  tons  autres  services  rendus 
aux  dits  navires  dans  un  port  quel- 
conque;  exception  est  faite  seulement 
pour  les  frais  speclaux  de  pilotage, 
d'occupation  de  hangars,  d'usage  do 
grues  et  pour  les  avantages  et  services 
speclaux  de  meme  nature  (frais,  avan- 
tages et  services  designes  sous  le 
nom  ci-apres,  de  "  Services  speciaux  " ) 
pour  lesquels  I'Amerique  a  paye  et 
continuera  de  payer  au  fur  et  a 
mesure. 

Article  III. — La  France  admet  que 
les  dits  navires  pourront,  a  partir  de 
cette  date  jusqu'a  I'evacuation  totale 
de  la  France  par  les  Forces  Ameri- 
caines, utiliser  les  dits  ports  sans  avoir 
a  payer,  pendant  la  dite  periode,  au- 
cune  des  taxes  de  peage,  ui  aucune  des 
depenses  de  relevement  du  plan  d'eai 
de  St.  Nazaire  ou  d'autres  ports,  nij 
aucun  autre  service  rendu  aux  dits 
navires  dans  un  port  quelconque  (ex^j 
cepte  seulement  s'il  s'agit  des  Services 
dits  Speciaux)  et  elle  exonerera  pai 
suite   I'Amerique  et   les   dits   navires. 


UNITED  STATES  LIQUIDATION   COMMISSION. 


165 


harmless  from  any  and  all  claims  on  ac- 
count of  all  of  the  foregoing,  save  only 
claims  on  account  of  the  said  special 
services. 


In  witness  whereof,  on  the  day  and 
year  tirst  above  written,  this  contract 
has  been  executed  in  four  parts,  each 
having  the  full  force  and  effect  of  an 
original,  by  the  United  States  of 
America,  acting  through  the  United 
States  Liquidation  Commission — War 
Department,  Edwin  B.  Parker,  chair- 
man ;  and  by  the  Republic  of  France, 
acting  through  le  Ministre  des  Travaux 
Publics  des  Transports  et  de  la  Marine 
Marchaude. 


UjsIted  States  of  AiiERicA, 
By    Edwin  B.  Parker, 
Chahman,    Lnlted   istates   Liquidotion 
Comniission — War  Department. 


Republic  of  France, 
By  A.  Claveille, 

Le   Ministre   des    Travaux 
Fuhlics  des  Transports 
et  de  la  Marine  Marchande. 


ainsi  que  leurs  proprietaires,  locataires 
et  capitaines,  de  toutes  reclamations, 
conformement  aux  indications  ci-des- 
sus,  a  I'exception  seulement  des  recla- 
mations concernant  les  Services  dits 
Speciaux. 

En  foi  de  quoi  et  a  la  date  ci-dessus 
indiquee  le  present  contrat  a  ete  dresse 
en  quatre  exemplaires,  pour  valoir 
chacun  d'eux  comme  original,  par  le 
Gouvernement  des  Etats-Unis  d'Ame-- 
rique  a^issant  par  I'intermediaire  du 
President  de  la  Commission  de  Liqui- 
dation du  Ministere  de  la  Guerre  des 
Etats-Unis,  Edwin  B.  Parker,  et  par 
le  Gouvernement  de  la  Republique 
Francaise  agissant  par  I'intermediaire 
de  Monsieur  le  Ministre  des  Travaux 
Publics  des  Transports  et  de  la  Marine 
Marchande. 

Etats-Unis  d'Amerique, 
Par  Edwin  B.  Parker, 

President  dela  Commission 
de  Liquidation  du  Departe- 
nient    de    la    Guerre    des 
Etats-Unis. 
Republique  Francaise, 
Par  A.  Claveille, 

Le  Ministre  des  Travaux 
Publics  des  Transports  et 
de  la  Marine  Marchande. 


APPENDIX  XXXI. 

Contract  Between  United  States  of  America  and  Republic  of  France 
Evidencing  Geneil\l  Settlement  of  All  Mutual  Accounts,  Claims,  and 
Demands  Arising  in  Europe,  November  20,  1919. 


This  contract  entered  into  this  20th 
day  of  November,  A.  D.  1919,  by  and 
between-  the  United  States  of  America 
(hereinafter  called  "America"),  act- 
ing through  the  United  States  Liqui- 
dation Commission — War  Department, 
Edwin  B.  Parker,  chairman,  of  the 
one  part,  and  the  Republic  of  France 
(hereinafter  called  "France")  acting 
through  the  Controleur  de  I'Adminis- 
tration  de  TArmee  Edouard  Boulanger, 
under  reserve  of  the  approval  of  the 
interested  ministers,  of  the  other  part, 
witnesseth : 

General  considerations. 

That  whereas,  between  the  6th  day 
of  April,   1917,   and  the  20th  day  of 


Le  present  contrat  redig6  le  20  No- 
vembre  1919  a  ete  etabli  par  et  entre : 

Le  Gouvernement  des  Etats-Unis 
(appele  ci-apres  Amerique)  represente 
par  la  Commission  de  Liquidation  des 
Etats-Unis  du  Departement  de  la 
Guerre,  Edwin  B.  Parker,  president, 
d'une  part,  et  la  Republique  Francaise 
(appelee  ci-apres  France)  representee 
par  M.  le  Controleur  de  l''"  Classe  de 
FAdministration  de  TArmee,  Boulan- 
ger, agissant,  sous  reserve  de  I'Appro- 
bation  des  Ministres  interesses,  d'autre 
part. 

Considerations  generales. 

Etant  donne  qu'entre  le  6  Avril  1917 
et  le  20  Aout  1919,  (periode  denommee 


166 


UNITED  STATES  LIQUIDATION   COMMISSIOISr. 


August,  1919  (hereinafter  designated 
"War  period")  tlie  War  Department 
of  tlie  United  States  of  America  and 
tlie  American  Expeditionary  Forces  on 
the  one  part  (hereinafter  called  "War 
Department " )  and  the  Republic  of 
France,  on  the  other  part,  had  numer- 
ous transactions  between  each  other 
•connected  with  or  incidental  to  the 
•conduct  of  the  war  in  the  prosecution 
of  which  the  parties  were  associated ; 
and 

Whereas  America,  for  said  War  De- 
partment, and  France  desire,  with  re- 
spect to  such  of  the  said  transactions 
as  occurred  in  Europe,  to  make  full, 
final  and  complete  settlement  of  all 
bills,  accounts,  claims,  obhgations.  de- 
mands, rights  and  causes  of  action  of 
every  nature  whatsoever,  whether 
growing  out  of  the  delivery  of  or  con- 
tract for  the  delivery  of  material,  sup- 
plies or  equipment  or  for  services  ren- 
dered, or  contracted  to  be  rendered, 
or  for  the  occupation  and  use  of 
all  public  properties  of  France  of  the 
domain  of  the  State  and  all  damages 
thereto,  initiated  or  otherwise  aris- 
ing or  accruing  during  the  said  war 
period,  said  settlement  to  be  herein- 
after designated  as  a  *'  European  set- 
tlement " ;  and 


Whereas  the  said  European  settle- 
ment "  relates  wholly  and  solely  to  the 
transactions  concerning  which  the  pro- 
cedure was  established  by  mutual 
agreements  by  the  following  instruc- 
tions : 

Instruction  No.  4  of  January  17, 
1918,  of  the  Office  General  des  Rela- 
tions Franco- Americaines ; 

Instruction  No.  4  bis  of  October  28, 
1918,  of  the  Commissariat  General  des 
Affaires  de  Guerre  Franco-Ameri- 
caines ; 

Instruction  No.  15  of  October  2, 
1918,  issued  by  the  Commissariat  Gen- 
eral des  Affaires  de  Guerre  Franco- 
Americaines ; 

Copy  of  these  instructions  are  an- 
nexed hereto  and  marked  for  identi- 
fication Exhibit  A. 


ci-apres  "  Periode  de  Guerre"),  le  De- 
parteiiienr  de  la  Guerre  des  Etats-Uni.s 
d'Anierique  ainsi  que  le.s  Forces  Ex- 
peditionnaires  Americaines  (denommes 
ci-apres  "  Departement- de  la  Guerre  ") 
d'une  part,  et  la  Republique  Francaise, 
d'autre  part,  out  eu  entre  eux  de  nom- 
breuses  transactions  liees  plus  ou 
moins  incidentment  a  la  conduite  de  la 
Guerre  pour  la  poursuite  de  laquelle 
les  deux  parties  s'etaient  associees ; 

Etant  donne  que  I'Amerique.  pour  le 
dit  Departement  de  la  Guerre,  et  la 
France  desirent  etablir  un  reglement 
en  tier,  detinitif  et  complet,  en  raison 
des  transactions  nientionnees  ci-apres 
qui  se  sont  poursuivies  en  Europe,  d^ 
toutes  les  factures,  comptes,  reclama- 
tions, obligations,  demandes,  droits  et 
motifs  d'actions  de  quelque  nature  que 
ce  soit,  qui  proviennent  de  la  livraison 
ou  de  contrats  pour  la  livraison  du  ma- 
teriel, approvisionnements  ou  equipe- 
ments,  ou  pour  services  rendus  ou  de- 
vant  etre  rendus  suivaut  contrat,  ou 
pour  I'occupation  et  usage  de  toutes  les 
proprietes  publiques  de  la  France  du 
Domaine  de  I'Etat  et  tous  dommages 
qui  i)ourraient  y  avoir  ete  faits,  ou 
engendres  d'une  autre  maniere,  surve- 
naut  ou  s'augmentant  pendant  la  dite 
periode  de  Guerre,  le  dit  reglement 
devant  etre  ci-apres  designe  sous  le 
nom  de  "  Reglement  Europeen." 

Etant  entendu  que  le  dit  "  Regle- 
ment Europeen  "  s'etend  en  totalite  et 
uniquement  aux  transactions  dont  la 
procedure  a  ete  etablie  d'un  commun 
accord  par  les  instructions  ci-apres  : 

No.  4.  du  17  Janvier  1918  de  I'Ofhce 
General  des  Relations  Franco-Ameri- 
caines ; 

No.  4  l)is  (hi  28  Octobre  1918.  du 
Commissariat  General  des  Affaires  de 
Guerre  Franco-Aniericaines ; 

No.  15  du  2  Octobre  1918,  due  Com- 
missariat General  des .  Affaires  de 
Guerre  Franco- Americaines ; 

Desquelles  instructions  un  exem- 
plaire  est  annexe  au  present  contrat 
(annexe  C). 


UNITED   STATES   LIQUIDATIOK"   COMMISSION". 


167 


Now,  therefore,  in  consideration  of 
the  premises  and  for  the  other  con- 
siderations herein  stated,  it  is  mutually 
a^srreed  between  the  parties  hereto  as 
follows : 

Article  I.  The  total  of  all  amounts 
to  the  credit  of  France  against  the 
said  War  Department  aggregates  one 
billion  nine  hundred  fifty-seven  million 
seven  hundred  fifty-nine  thousand  one 
hundred  and  thirteen  francs  forty-one 
centimes  (frs.  1,957,759,113.41)  plus 
five  million  four  hundred  twenty-two 
thousand  seven  hundred  and  six  and 
15/100  ($5,422,706.15)   dollars. 

Article  II.  The  total  of  all  amounts 
to  the  credit  of  America  for  the  said 
War  Department  against  France  ag- 
gregates four  hundred  and  sixty-nine 
million  one  hundred  and  forty  thousand 
and  eighty-five  francs  eighty-nine  cen- 
times (frs.  469,140,085.89),  plus  twenty- 
one  million  eight  hundred  fifty-nine 
thousand  six  hundred  sixty  and  20/l(X) 
($21,859,660.20)    dollars. 

Article  III.  All  bills,  accounts, 
claims,  obligations,  and  demands  of 
every  nature  whatsoever  in  respect  of 
the  aforesaid  transactions  between  the 
said  War  Department  on  the  one  part 
and  the  Republic  of  France  on  the  other 
part,  which  said  transactions  arose  or 
accrued  in  Europe  prior  to  August  20, 
1919,  and  which  are  not  embraced  in 
this  European  settlement,  shall  be  for- 
ever barred  and  shall  not  be  asserted 
by  one  of  the  parties  hereto  against 
the  other. 


Article  IV.  It  is  further  agreed  be- 
tween the  parties  hereto  as  follows : 

{a)  In  this  European  settlement 
America  has  agreed  to  transfer  and 
pay  to  France,  in  specie,  the  sum  of 
6,986,500.43  Swiss  francs  now  on  de- 
posit at  Berne,  Switzerland,  to  the 
credit  of  the  financial  requisition  offi- 
cer, American  forces  in  France,  in  con- 
sideration for  which  France  has 
agreed  to  give  and  has  given  America 
credit  in  French  francs  at  an  exchange 


En  consequence,  etant  donne  ce  qui 
precede  et  etant  donne  les  autres  con- 
siderations ci-incluses,  il  est  decide  d'un 
commun  accord  ce  qui  suit  entre  les 
dites  parties: 

Article  I.  Le  montant  total  des  cre- 
ances  de  la  France  sur  le  dit  Departe- 
ment  de  Guerre  des  Etats-Unis  se 
montent  a  un  millard  neuf  cents  ciii- 
quante  sept  millions  sept  cent  cin- 
quante  neuf  mille  cent  treize  fran^g^et 
quarante  et  un  centimes  (frs.  1,957,- 
759,113.41  plus  cinq  millions  quatre 
cent  vingt-deux  mille  sept  cent  six  dol- 
lars et  quinze  cents  ($5,422,706.15). 

Article  II.  Le  montant  total  des 
creances  de  I'Amerique  pour  le  dit 
Departement  de  la  Guerre  sur  la 
France  se  montent  a  quatre  soixante- 
neuf  millions  cent  quarante  mille 
quatre-vingt  cinq  francs  et  quatre- 
vingt  neuf  centimes  (frs.  469,140,- 
085.89)  plus  vingt  et  un  millions  huit 
cent  cinquante  neuf  mille  six  cent 
soixante  dollars  et  vingt  cents  ($21,- 
859,660.20). 

Article  III.  Toutes  les  factures, 
comptes.  reclamations  et  demandes,  de 
quelque  nature  que  ce  soit,  en  ce  qui 
concerne  les  transactions  mention- 
nees  ci-dessus  entre  le  dit  Departe- 
ment de  la  Guerre  des  Etats-Unis,  et 
la  Republique  Francaise  et  afferentes  a 
des  livraisons  effectuees  ou  a, des  serv- 
ices rendus  en  Europe  anterieurement 
au  20  Aout  1919  et  qui  ne  sont  pas 
centenues  dans  ce  "Reglement  Euro- 
peen"  seront  considerees  comme  fore- 
closes definitivement  et  ne  pourront 
plus  etre  representees  par  I'une  des 
parties  contre  I'autre. 

Article  IV.  En  autre  il  est  convenu 
ce  qui  suit  entre  les  parties : 

{a)  Dans  ce  "  Reglement  Euro- 
peen,"  I'Amerique  a  convenu  de  trans- 
ferer et  de  payer  a  la  France,  en 
especes,  la  somme  de  six  millions 
neuf  cent  quatre  vingt  six  mille  cinq 
cents  francs  suisses  quarante-trois 
( 6,986. 5(K).43)  deposse  maintenant  a 
Berne  (Suisse)  au  credit  du  "Finan- 
cial Requisition  Officer "  des  Forces 
Americaines  en  France,  pour  lequel  la 


168 


UNITED  STATES  LIQUIDATION   COMMISSION. 


value  of  1.1625;  that  is  to  say,  in  the 
sum  of  8,121,806.75  French  francs. 


France  has  agreed  and  does  hereby 
agree  that  in  the  event  the  balance  in 
the  general  settlement  now  being  nego- 
tiated between  France  and  America 
should  be  in  favor  of  America,  then 
in  such  event  the  said  sum  of  8,- 
121,806.75  French  francs  will  be 
promptly  repaid  to  America  in  cash. 

(by\  America  heretofore  seized,  as  a 
prize  of  war,  2,614.30  metric  tons  of 
coal  and  thereafter  delivered  same  to 
France,  charging  same  against  France 
in  the  coal  exchange  accoimt  in  the 
sum  of  tifty-four  thousand  seven  hun- 
dred fifty-three  dollars  ten  cents  ($54,- 
753.10).  A  question  has  arisen  as  to 
whether  or  not  this  coal  was  enemy 
war  material,  and  this  question  has 
been  referred  to  the  Franco-Beige 
Commission  de  Recuperation.  Should 
this  commission  decide  that  said  coal 
was  not  enemy  war  material,  then  in 
such  event  America  agrees  to  pay 
France  the  amount  charged  for  the 
said  coal,  namely,  $54,753.10. 


(c)  Certain  aircraft  material  of  the 
value  of  sixty-four  thousand  four  hun- 
dred eighteen  francs  nine  centimes 
(frs.  64,418.09)  furnished  by  the 
"  Tardieu  Mission "  of  the  French 
Government  to  the  said  War  Depart- 
ment has  been  by  the  said  War  De- 
partment returned  to  the  French  Com- 
mission and  is  now  held  by  it  in 
America  as  the  property  of  the  French 
Government.  Without  obligating  it- 
self to  purchase  same.  America  agrees 
to  cause  an  investigation  to  be 
promptly  made  and  if  it  finds  it  can 
use  the  said  material  to  advantage,  it 
will  take  delivery  of  and  pay  for  same 
at  a  price  to  be  fixed  by  agreement  be- 
tween the  two  Governments. 


France  a  accepte  de  donner  et  a  ouvert 
a  I'Amerique  un  credit  en  francs  fran- 
caise  au  taux  du  change  de  1.1625 
d'est-a-fire  un  montant  de  huit  millions 
cent  vingt  et  un  mille  huit  cent  six 
francs  francais  soixante  quinze, 
(8.121,806.75). 

La  France  a  accepte  et  accepte  par  la 
presente,  dans  le  cas  ou  la  balance  du 
reglement  general  en  cours  de  negocia- 
tion  entre  la  France  et  I'Amerique  se- 
rait  en  favour  de  I'Amerique,  que, 
(hnis  ce  cas.  la  dite  somme  de 
8,121,806.75  francs  francais  serait  rem- 
boursees  sans  delai  a  I'Amerique  en 
especes. 

(h)  I'Amerique  a  saisi  comme  prises 
de  guerre,  2,614,300  tonnes  metriques 
de  charbon.  qu'elle  a,  par  la  suite,  de- 
livrees  a  la  France.  Ce  charbon  a  ete 
porte  au  debit  de  la  France  dans  le 
compte  d'echange  des  charbons  pour 
la  somme  de  cinquante  quatre  mille 
sept  cent  cinquante  trois  dollars  dix 
cents  ($54,753.10).  Une  question  s'est 
elevee  sur  le  point  de  savoir  si  ce 
charbon  etait  ou  non  du  materiel  en- 
nemi  de  guerre  et  cette  question  a  ete 
soumise  a  la  Commission  de  Recupera- 
tion Franco-Beige.  Si  la  Commission 
decidait  que  le  dit  charbon  n'etait  pas 
du  materiel  ennemi  de  guerre,  dans  ce 
cas  I'Amerique  accepterait  de  payer  a 
la  France  la  somme  qui  lui  a  ete  debi- 
tee  pour  ce  charbon,  c'est-a-dire : 
54,753.10  dollars. 

(c)  Un  certain  nombre  de  materiel 
d'aviation  d'une  valeur  de  soixante 
quatre  mille  quatre  cent  dix  huit  frs. 
neuf  (frs.  64,418.09),  fourni  par  la 
Mission  Tardieu  du  Gouvernement 
Francais  au  dit  Departement  de  la 
Guerre,  a  ete  rendu  par  ce  dit  Departe- 
ment de  la  Guerre  a  la  Mission  Fran- 
caise  et  est  maintenant  gard6  par 
cette  derniere  en  Amerique  comme  pro- 
priete  du  Gouvernement  Francais. 
Sans  prendre  I'obligation  de  acheter 
ce  materiel,  I'Amerique  accept  de  pro- 
voquer  sans  delai  des  etudes  dans  le 
but  de  savoir  si  ce  materiel  pent  etre 
utilis^e  avantageusement  par  elle  et 
dans  ce  cas  elle  en  prendra  possession 
et  elle  la  paiera  a  un  prix  a  etablir 


UNITED  STATES  LIQUIDATION   COMMISSION. 


169 


(f7)  Under  the  contract  entered  into 
between  America  and  France  dated 
August  28,  1919,  dealing  with  artillery 
and  ammunition,  France  agreed  to 
supply  America  with  materials  as  fol- 
lows : 

1.  944  75-m/m  gun  materials,  model 
1897,  with  limbers. 

2.  700  155-m/m  howitzer  materials, 
model  1917,  Schneider  design,  with 
limbers. 

3.  198  155-m/m  G.  P.  F.  materials, 
with  limbers. 

4.  Collection  of  additional  parts,  as 
in  said  contract  more  specifically  de- 
scribed. 

The  amount  due  by  America  under 
the  terms  of  the  said  contract  of  Au- 
gust 28,  1919,  has  been  taken  into  ac- 
count in  computing  the  amounts  to  the 
credit  of  France  mentioned  in  Article 
I  hereof  The  delivery  of  materials 
which  France  contracted  to  deliver 
under  the  terms  of  said  contract  has 
not  yet  been  completed,  and  nothing 
herein  contained  shall  release  France 
from  its  obligation  to  promptly  com- 
plete such  deliveries. 

In  witness  whereof  on  the  day  and 
year  first  above  written,  this  contract 
has  been  executed  in  four  parts,  each 
having  the  full  force  and  effect  of  an 
original,  by  the  United  States  of 
America,  acting  through  the  United 
States  Liquidation  Commission — War 
Department,  Edwin  B.  Parker,  chair- 
man, of  the  one  part,  and  by  the  Re- 
public of  France,  acting  through  the 
Controleur  de  TAdministration  de 
I'Armee.  Edouard  Boulanger,  acting 
under  reserve  of  the  approval  of  the 
interested  ministers,  of  the  other  part. 

United  States  of  America, 
By  Edwin  B.  Parker, 

Chairman,    United  States 
Liquidation    Commission — 
War  Department. 
Republic  of  France, 
By  L.  Boulanger, 
Controleur   de   V Administration 
de  VArmee. 


aprds  entente  entre  les  deux  Gouverne- 
ments. 

id)  Aux  termes  du  contrat  etabli 
entre  I'Amerique  et  la  France,  en  dare 
du  28  Aout  1919,  au  sujet  de  I'Artil- 
lerie  et  des  Munitions,  la  France  s'est 
engagee  a  fournir  a  I'Amerique  les  ma- 
teriels  suivantes: 

1.  944  materiel  de  75,  modele  1897 
avec  avant-train.  

2.  700  materiel  de  155  court,  module 
1917  Schneider  avec  avant-train. 

3.  198  materiel  de  155  G.  P.  F.  avec 
avant-train. 

4.  Collections  de  pieces  de  rechange 
comme  il  est  indique  en  detail  dans  le 
contrat  susviee. 

La  somme  due  par  I'Amerique  aux 
termes  du  dit  Contrat  du  28  Aout  1919 
a  ete  incluse  dans  I'etablissement  an 
montant  du  credit  de  la  France  fi- 
gurant a  I'Article  I  ci-dessus.  Les  ma- 
t^riels  que  la  France  s'est  engagee  a 
fournir  aux  termes  du  dit  Contrat  n'ont 
pas  encore  ete  fournis  entierement ;  11 
est  entendue  que  le  present  contrat 
n'a  pas  pour  effet  de  decharger  la 
France  de  son  obligation  de  satisfaire 
rapidement  a  ces  cessions. 

En  foi  de  quoi,  le  jour  et  I'annee 
precites,  le  present  contrat  a  ete  redige 
en  quatre  exemplaires,  chacun  d'eux 
ayant  la  meme  valeur  et  effet  qu'un 
original,  par  les  Etats-Unis  d'Amerique, 
representes  par  la  Commission  de 
Liquidation  des  Etats-Unis,  Departe- 
ment  de  la  Guerre,  Edwin  B.  Parker, 
president,  d'une  part,  et  par  la  Re- 
publique  Francaise,  representee  par  M. 
le  Controleur  de  lere  Classe  de  I'Ad- 
ministration  de  I'Armee  Boulanger, 
agissant  sous  reserve  de  1'  approbation 
des  Ministres  interesses,  d'autre  part. 
Etats-Unis  D'Amerique, 

Par  Edwin  B.  Parker, 
President,  Commission  de  Liquidation 

des  Etats-Unis,  Department  de  la 

Guerre. 

Republique  Francaise, 
Par  L.  Boulanger, 
Controleur    de    V Administration    de 

VArmee. 


170 


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APPENDIX  XXXII. 


Contract   for   the    General    Setti^m 
America  and  Republic  of 

Til  is  contract,  entered  into  this  25th 
*lay  of  November,  A.  D.  1919,  by  and 
between  the  United  States  of  America 
(hereinafter  called  "America")  act- 
ins  through  the  United  States  Liquida- 
tion Commission — War  Department, 
Edwin  B.  Parker,  chairman,  on  the  one 
part,  and  the  Republic  of  France  (here- 
inafter called  "France"),  acting 
through  le  Sous-Secretaire  d'Etat  aux 
Finances,  Paul  INIorel,  on  the  other  part, 
witnesseth : 

That  irhereas,  between  the  6th  day 
of  April,  1917,  and  the  20th  day  of 
August,  1919  (hereinafter  designated 
"War  period"),  the  War  Department 
of  the  United  States  of  America  and 
the  American  Expeditionary  Forces, 
on  the  one  part  (hereinafter  called 
"War  Department")  and  the  Republic 
of  France,  on  the  other  part,  had  nu- 
merous transactions  between  each  other 
connected  with  or  incidental  to  the 
couduct  of  the  war  in  the  prosecution 
of  which  the  parties  were  associated; 
and 

Whereas  America,  for  the  said  War 
Department,  and  France  desire  to  make 
a  full,  final,  and  complete  settlement 
in  respect  to  the  transactions  afore- 
said of  all  bills,  accounts,  claims,  obli- 
Liations,  demands,  rights,  and  causes  of 
action  of  every  nature  whatsoever, 
whether  growing  out  of  the  delivery 
of  or  contracts  for  the  delivery  of  ma- 
terial, supplies,  or  equipment,  or  for 
services  rendered  or  contracted  to  be 
rendered,  or  for  the  occupation  and 
use  of  all  public  properties  of  France 
and  all  damages  thereto,  initiated  or 
otherwise  arising  or  accruing  during 
the  said  war  period,  said  settlement  to 
be  hereinafter  designated  as  "  General 
settlement " :  and 


Whereas  the  parties  hereto,  in  ar- 
riving at  such  general  settlement,  have 


ent    Between    the    I'nited    States    of 
France,  November  25,  1919. 

Ce  contrat  redig^  le  25  Novembre 
1919  a  ete  etabli  par  et  entre  le  Gou- 
vernement  des  Etats-Unis  (appel^  ci- 
apres  Amerique)  represente  par  la 
Commission  de  Liquidation  des  Etats- 
Unis  du  D6partement  de  la  Guerre, 
Edwin  B.  Parker,  President,  d'une 
part;  et  la  Republique  Frangaise  (ap- 
pel4e  ci-apr^s  France)  representee  par 
M.  le  Sous-Secretaire  d'Etat  aux  Fi- 
nances, I'aul  :Morel,  d'autre  part ; 

Etant  donne  qu'entre  le  6  Avril  1917 
et  le  20  Aoilt  1919,  (denomme  ci-apr6s 
"Periode  de  Guerre"),  le  Departement 
de  la  Guerre  des  Etats-Unis  d'Ameri- 
que,  ainsi  que  les  Forces  Exp6dition- 
naires  Am^ricaines  (denomm^s  ci- 
apres  "Departement  de  la  Guerre") 
d'une  part,  et  la  Republique  Frangaise, 
d'autre  part,  ont  eu  entre  eux  de  nom- 
l>revL'>;es  transactions  liees  plus  ou  moins 
ineidentment  k  la  conduite  de  la  Guerre 
pour  la  poursuite  de  laquelle  les  deux 
parties  s'^taient  associ^es ;  et 

p]tant  donne  que  I'Amerique,  pour  le 
dit  Departement  de  la  Guerre,  et  la 
France  desirent  etablir  un  r^glement 
entier,  detinitif  et  complet,  en  raison 
des  transactions  mentionn#es  ci-dessus,- 
de  toutes  les  factures,  comptes,  recla- 
mations, obligations,  demandes,  droits 
et  motifs  d'actions'  de  quelle  que  na- 
ture que  ce  soit,  qui  proviennent  de  la 
livraison  ou  de  contrats  pour  la  livrai- 
son  du  materiel,  approvisionnements  ou 
^luipements,  ou  pour  services  rendus 
ou  devant  etre  rendus  suivant  contrat, 
ou  pour  Toccupation  et  I'usage  de 
toutes  les  propri^t^s  publiques  du  do- 
ma  ine  de  I'Etat  Frangais  et  tons 
dommages  qui  pourraient  y  avoir  6te 
faits  ou  engendr6s,  ou  d'une  autre 
manidre  s'elevant  ou  s'accumulant 
pendant  la  dite  Periode  de  Guerre,  le 
dit  r^glement  devant  etre  designe  sous 
le  nom  de  "Reglement  G6n6ral" ;  et 

Etant  donn^queles  parties  ci-dessus 
designees  en  arrivant  a  ce  rdglement 


UNITED  STATES  LIQUIDATION   COMMISSION. 


173 


agreed  that  in  respect  to  the  trans- 
actions aforesaid  the  total  of  all  franc 
credits  due  each  party  shows  a  net 
balance  due  France  of  one  billion  four 
hundred  eighty-eight  million  six  hun- 
dred nineteen  thousand  and  twenty- 
seven  francs  and  tiftj'^two  centimes 
(frs.  1,488,619,027.52),  and  the  total 
of  all  dollar  credits  due  each  party 
shows  M  net  balance  due  America  of  one 
hundred  seventy-seven  million  one 
hundred  forty-nine  thousand  eight 
hundred  and  sixty-six  and  86/100 
( $177,149,866.86 )   dollars ; 


Now,  therefore,  in  consideration  of 
the  premises  and  of  the  agreement  on 
the  part  of  America  to  pay  France  the 
said  sum  of  one  billion  four  hundred 
eighty-eight  million  six  hundred  and 
uineteen  thousand  and  twenfy-seven 
francs  and  fifty-two  centimes  (frs. 
1,488,619,027.52)  and  the  agreement  on 
the  part  of  France  to  pay  America  the 
said  sum  of  one  hundred  seventy-seven 
million  one  hundred  forty-nine  thous- 
and eight  hundred  sixty-six  and  86/100 
($177,149,866.86)  dollars,  it  is  mutu- 
ally agreed  between  the  parties  hereto 
afs  follows : 

Article  I.  The  Republic  of  France 
does  hereby  fully,  completely,  and  in 
all  things,  release  and  discharge  the 
United  States  of  America,  and  the 
United  States  of  America  does  hereby 
fully,  completely,  and  in  all  things,  re- 
lease and  discharge  the  Republic  of 
France  in  respect  of  the  transactions 
aforesaid,  from  all  bills,  accounts, 
claims,  obligations,  demands,  rights, 
causes  of  action,  suits,  and  contro- 
versies of  every  nature  whatsoever 
which  either  party  now  has  against  the 
other,  or  which  may  hereafter  arise, 
whether  by  reason  of  or  in  anywise 
incident  to  or  growing  out  of  the  de- 
livery or  contract  for  the  delivery  of 
materials,  supplies  or  equipment,  or 
for  services  rendered,  or  contracted  to 
be  rendered,  or  for  the  occupation  and 
use  of  all  public  properties  of  France 
and  all  damages  thereto  or  otherwise 


general  out  decide  qu'en  raison  des 
transactions  designees  plus  haut  la 
somme  de  tons  les  credits  en  Francs 
dus  a  chaque  partie  fait  ressortir  une 
balance  nette  en  faveur  de  la  France 
ile  un  milliard  quatre  cents  quatre- 
vingt-huit  million  six  cent  dix-neuf 
mille  vingt-sept  francs  et  cinquante- 
deux  centimes  (frs,  1,488,619,027.52)  • 
et  la  somme  de  tons  les  credits  en 
dollars  dus  a  chaque  partie  f alt  rer-"~ 
sortir  une  balance  nette  en  faveur  de 
I'Amerique  de  cent  soixante-dix-sept 
million  cent  quarante-neuf  mille  huit 
cent  soixante-six  dollars  et  quatre- 
vingt-six cents  (dollars  177,149,866.86)  ; 

En  consequence,  etant  donne  ce  qui 
precede,  et  etant  donne  I'acceptation  de 
la  part  de  I'Amerique  de  payer  a  la 
France  la  dite  somme  de  un  milliard 
quatre  cents  quatre-vingt-huit  million 
six  cent  dix-neuf  mille,  vingt-sept 
francs  et  cinquante-deux  centimes  (frs. 
1,488,619.027.52)  et  I'acceptation  de  la 
P^rance  de  payer  a  TAmerique  la  dite 
somme  de  cent  soixante-dix-sept  mil- 
lion cent  quarante-neuf  mille  huit  cent 
soixante-six  dollars  et  quatre-vingt-six 
cents  (dollars  177,149,866.86),  il  est 
decide  d'un  commun  accord  ce  qui  suit 
entre  les  dites  parties : 

Article  I.  Par  ces  presentes,  la  R4- 
publique  Francaise  libere  et  decharge 
tout  a  fait,  completement  et  en  toutes 
manieres  les  Etats-Unis  d'Amerique  et 
les  Etats-Unis  d'Amerique  liberent,  de- 
chargent  tout  a  fait,  completement  et 
en  toutes  manieres  la  Republique  Fran- 
caise, en  raison  des  transactions  men- 
tionnees  ci-dessus,  de  toutes  les  fac- 
tures,  coinptes,  reclamations,  obliga- 
tions, demandes,  droits,  motifs  d'ac- 
tions,  poursuites  et  controverses  de 
toute  nature,  aussi  bien  ceux  que  I'une 
et  I'autre  partie  a  I'heure  actuelle  a 
faire  valoir  I'une  contre  I'autre,  que 
ceux  qui  pen  vent  s'elever  par  la  suite 
soit  en  raison  de,  soit  touchant  de 
quelle  que  maniere  que  ce  soit  S,  soit 
provenant  de  la  livraison  on  de  con- 
trats  pour  la  livraison  de  materiel,  ap- 
provisionnements  ou  equipements,  ou 
pour   services   rendus  ou  devant  etre 


174 


UNITED  STATES  LIQUIDATION   COMMISSION. 


initiatecT,  arising  or  accruing  during 
the  said  war  period  between  tlie  said 
War  Department  on  the  one  part  and 
the  Republic  of  France  on  the  other 
part. 


Article  II.  Notliing  hereinbefore 
contained  shall  be  held  or  construed  to 
in  anywise  annul,  alter,  modify,  or 
alfect  the  obligations  of  France  lield 
by  America  or  the  obligations  of  either 
party  hereto  arising  out  of  the  follow 
ing  special  contracts  or  agreements 
namely : 

(a)  TJie  contract  between  Americo 
and  France,  dated  August  1st,  1919, 
whereby  America  sold  and  France  pur- 
( lulled  certain  properties  therein  re- 
ferred to,  France  agreeing  to  pay 
therefor  the  sum  of  four  hundred  rail- 
lion  ($400,000,000)  dollars  with  inter- 
est thereon,  at  the  time  and  under  the 
terms  mentioned  therein ; 


(h)  The  contract  between  America 
and  France  for  the  settlement  of  rail- 
road transportation  and  other  claims, 
dated  October  1st,  1919,  in  which 
America  agrees  to  pay  France  the  sum 
of  four  hundred  thirty-four  million  nine 
hundreil  eighty-five  thousand  three  hun- 
dred eight-nine  and  73/100  (frs.  434,- 
985,389.73)  francs; 

(c)  The  contract  between  America 
and  France  for  the,  settlement  of  all 
port  dues  and  similar  claims,  dated 
October  1st,  1919,  in  which  America 
agrees  to  pay  France  the  sum  of  three 
millioh  (frs.  3,000.000)  francs; 

{(I)  All  contracts,  agreements  or  ar- 
rangements entered  into  between  Amer- 
ica and  France  for  or  in  connection 
with  sales  made  by  America  to  France 
in  the  United  States  since  November 
11th,  1918. 


rendus  pur  suite  de  contrats  ou  pour 
Toccupation  et  I'usage  de  toutes  pro- 
prietes  publiques  du  domaine  de  TEtat 
Francaise  et  tons  dommages  qui  pour- 
raient  y  avoir  ete  faits  ou  engendrSs 
ou  d'lme  autre  mani^re  s'elevant  ou 
s'accumulant  durant  la  dite  Periode 
de  Guerre  entre  le  dit  Departement  de 
la  Guerre  d'une  part,  et  ia  Uepubliquc 
Francaise  d'autre  part. 

Article  II.  Kien  de  ce  qui  est  con- 
tenu  ci-dessus  ne  doit  etre  retenu  ou 
interprets  de  facon  ^  annuler,  alt^rer 
ou  modifier  ou  affecter  en  quelle  que 
maniere  que  ce  soit  les  obligations  de 
la  France  envers  TAmeriqiie  ou  les 
obligations  de  Tune  et  I'autre  partie  ci- 
contre  provenant  des  contrats  ou  ac- 
cords speciaux  qui  suivent,  (i  savoir : 

(a)  Le  Contrat  entre  I'Amerique  et  la 
France,  en  flate  du  I^""  Aout  1919,  par 
l^piel  I'Amerique  a  vendu  et  la  France 
a  achet'e  certaines  propri^tSs  aux- 
(luelles  il  est  fait  allusion  dans  le  Con- 
trat en  question,  la  France  consentant 
a  payer  par  la  meme  la  somme  de 
quatre  cents  millions  de  dollars  avec 
rint^ret  a  I'epoque  et  sous  les  c<mdi- 
tions  mentionn^s  dans  le  Contrat  en 
question. 

b)  Le  Contrat  entre  I'Amerique  et  la 
France  pour  le  reglement  des  trans- 
ports par  chemin  de  fer  et  d'autres 
reclamations,  en  date  du  l*'  Octobre 
1919.  par  lequel  I'Amerique  consent  k 
payer  k  la  France  la  soinme  de  quatre 
cent  trente  quatre  millions  neuf  cent 
quatre-vingt  cinq  mille  trois  cent 
quatre-vingt  neuf  francs  et  73  centimes 
(4.34,985,389.73)  frs. 

c)  Le  Contrat  entre  I'Amerique  et  la 
France  pour  le  reglement  de  toutes  les 
taxes  de  p^age  et  des  reclamations  de 
meme  nature,  en  date  du  1^""  Octobre 
1919,  par  lequel  I'Amerique  consent  k 
payer  a  la  France  la  somme  de  trois 
millions  de  francs  (3,000,000.00)  frs. 

(/)  Tons  contrats,  accords  ou  ententes 
passes  entre  I'Amerique  et  la  France 
pour  ou  relativement  k  des  ventes 
faites  par  I'Amerique  k  la  France  aux 
Etats-Unis  depuis  le  11  Novembre 
1918. 


UNITED   STATES  LIQUIDATION    COMMISSION. 


175 


Article  III.  This  contract  shall  not 
operate  as  a  release  or  modification  of 
or  in  any  wise  affect  whatever  claim 
France  may  now  have  against  America 
uTowing  out  of  services  rendered  by 
P^rance  to  America  during  the  war 
Iteriod  in  connection  with  the  ocean 
transportation  of  American  troops. 


Article  IV.  This  contract  shall  not 
be  construed  to  relate  to  or  in  any  wise 
affect  claims  or  demands  howsoever 
arising  between  the  nationals  of  either 
country,  on  the  one  part,  and  the 
parties  hereto,  or  either  of  them,  or 
their  nationals,  on  the  other  part. 
Neither  shall  it  in  any  wise  affect 
transactions  pertaining  to  any  depart- 
ment or  departments,  agency  or  agen- 
cies of  the  Government  of  the  United 
States  of  America  Other  than  the  said 
War  Department  and  all  of  the  agen- 
cies of  the  said  War  Department  and 
the  American  Army  and  all  of  its 
branches  and  agencies. 


In  witness  whereof,  on  the  day  and 
year  first  above  written,  this  contract 
has  been  executed  in  four  parts,  each 
having  the  full  force  and  effect  of  an 
original,  by  the  United  States  of  Amer- 
ica, acting  through  the  United  States 
Liquidation  Commission — War  Depart- 
ment, Edwin  B.  Parker,  chairman,  and 
by  the  Republic  of  France,  acting 
through  le  Sous-Secretaire  d'Etat  aux 
Finances,  Paul  Morel. 

United  States  of  Ameeica, 
By  Edwin  B.  Paeker, 
Chairman,   United  States  Liquidation 
Commission — War  Department. 

Republic  of  Feance, 
By  P.  MoEEL, 
Le  Sous-Secretaire  d'Etat  aux  Finan- 
ces. 


Article  III.  Ce  Contrat  n'aura  pas 
pouvoir  d'annuler,  modifier  ou  affecter 
de  quelle  que  maniere  que  ce  soit  toutes 
reclamations  que  la  France  pourrait 
avoir  k  I'heure  actuelle  a  faire  valoir 
centre  I'Amerique  et  provenant  des 
services  rendus  par  la  France  k  I'Ame- 
rique pendant  la  P§riode  de  Guerre  et 
ayant  trait  aux  transports  des  troupes 
americaines  sur  FOcean. 

Article  IV.  Ce  Contrat  ne  doit  eti*e 
interprete  comnie  se  rapportant  d'une 
maniere  quelconque  ou  affectant  de 
quelle  que  manidre  que  ce  soit  les  re- 
clamations ou  demandes  de  toute 
nature,  s'61evant  entre  les  nationaux 
de  I'un  et  Tautre  Pays,  d'une  part,  et 
les  parties  ci-incluses  ou  I'une  d'elles, 
ou  leurs  Nationaux,  d'autre  part.  Ce 
Contrat  concerne  uniquement  le  D6- 
partement  de  la  Guerre  et  toutes  les 
Agences  du  dit  Departement  de  la 
Guerre,  I'Arm^e  Am§ricane  et  toutes  ses 
branches  et  Agences,  mais  ne  concerne 
nullement  un  autre  ou  plusieurs  autres 
Departements  du  Gouvernement  des 
Etats-Unis  d'Am^rique  ainsi  que  leur 
Agence  et  leurs  Agences. 

En  foi  de  quoi,  le  jour  et  I'ann^e  au 
debut  precit§s,  ce  Contrat  a  ete  redig^ 
en  quatre  exemplaires,  chacun  d'eux 
ayant  la  meme  valeur  et  effet  qu'un 
original,  par  les  Etats-Unis  d'Ameri- 
que,  represent^s  par  la  Commission  de 
Liquidation  des  Etats-Unis,  Departe- 
ment de  la  Guerre,  Edwin  B.  Parker, 
President,  et~  par  la  Republique  Fran- 
caise,  representee  par  M.  le  Sous-Se- 
cretaire d'Etat  aux  Finances,  Paul 
Morel. 

Etats-Unis  d'Ameeique, 
Par  Edwin  B,  Paeker, 

President,  Commission  de 

Liquidation  des  Etats-Unis — 

Departm,e)vt    de    la    Guerre. 

Republique    Feancaise, 

Par  P.  MoEEL, 

Sous-Secreto.ire  d'Etat  aux  Finances. 


176 


UNITED  STATES  LIQUIDATION   COMMISSION. 


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APPENDIX  XXXIII. 

French  Contract  of  Indemnity  for  Torts,  Workmen's  Compensation,  Rents, 

AND  Requisitions. 


This  iontnwt,  entered  into  this  first 
day  of  December,  A.  D.  1919,  by  and 
between  the  United  States  of  America 
(hereinafter  called  "America"),  act- 
inj^  through  the  United  States  Liquida- 
tion Commission — War  Department, 
Edwin  B.  Parlver,  chairman,  of  the  one 
part,  and  tlie  Republic  of  France 
(hereinafter  called  "France"),  acting 
thi'ough  Edouard  Ignace,  le  Sous-Sec- 
retaire d'Etat  de  la  Justice  Militaire 
au  Minist^re  de  la  Guerre,  of  the  other 
part,  witnesseth: 

That  whereas,  between  the  6th  day 
of  April,  1917,  and  the  31st  day  of 
December,  1919  (hereinafter  desig- 
nated "War  period")  the  War  De- 
partment of  the  United  States  and 
members  of  its  military  forces,  in- 
cluding the  American  Expeditionary 
Forces  and  the  American  Forces 
in  France  (all  hereinafter  referred  to 
as  "American  Military  Forces") 
have,  as  incidental  to  or  as  connected 
with  the  conduct  of  the  war  in  the 
prosecution  of  which  the  parties  here- 
to were  associated,  occupied  and  used 
real  property,  appropriated  and  used 
personal  property,  damaged  real  and 
personal  property,  and  damaged  indi- 
viduals resulting  in  their  injury  or 
death ;  all  of  which  said  occupancies, 
appropriations,  uses,  and  damages  oc- 
curred or  shall  occur  in  France  during 
the  said  War  period ;  and 


Whereas  America  has  maintained 
representatives  in  France  for  more 
than  a  year  after  the  signing  of  the 
Armistice  for  the  purpose  of  receiving 
investigating,  and  settling  all  claims 
filed  or  lodged  against  it ;  and 

Whereas,  the  work  of  these  repre- 
sentatives has  been  practically  com- 
pleted in  so  far  as  the  receipt,  inves- 
tigation, and  consideration  of  all  such 
claims  is  concerned ;  and 


Ce  contrat  r^dige  le  1^'  Decembre  1919 
a  4t6  6tabli  par  et  entre  le  Gouverne- 
ment  des  Etats-Unis  (appel6  ci-apr§s 
"Amerique")  reprgsente  par  la  Com- 
mission de  Liquidation  des  Etats-Unis 
du  D§partement  de  la  Guerre,  Edwin 
B.  Parker,  president,  d'une  part;  et-la^ 
Republique  Francaise,  (appel4e  ci- 
apr^s  "France")  representee  par  M. 
Edouard  Ignace,  Sous  -  Secretaire 
d'Etat  de  la  Justice  Militaire  au  Mi- 
nistere  de  la  Guerre,  d'autre  part; 

Etant  donne  qu'entre  le  6  Avril  1917 
et  le  31  D4cembre  1919  (d^nomme  ci- 
apr^s  "  Periode  de  Guerre  " )  le  D6- 
partement  de  la  Guerre  des  Etats-Unis 
FAmerique  et  le  personnel  faisant 
partie  de  ses  Forces  Militaires,  y  com- 
pris  les  Forces  ExpSditionnaires  Ame- 
ricaines  et  les  Forces  Am^ricaines  en 
France  (tous  ci-apr^s  design^s  sous  le 
nom  de  "  Forces  Militaires  Am6ri- 
caines " )  ont,  d'une  facon  plus  ou 
moins  directement  lies  k  la  conduite 
de  la  guerre,  pour  la  poursuite  de  la- 
quelle  les  deux  parties  s'etaient  asso- 
ciees,  occupe  et  utilise  des  immeubles,. 
se  sont  approprie  et  ont  utilise  des 
biens  mobiliers,  ont  deteriore  des  im- 
meubles et  des  biens  mobiliers  et  ont 
porte  prejudice  ^  des  individus  en  leur 
causant  soit  des  blessnres,  soit  la 
mort ;  et  etant  donne  que  tous  les  dits 
occupations,  appropriations,  utilisa- 
ti(»ns  et  donnnages  ont  eus  lieu  ou 
auront  lieu  en  France  pendant  la  dite 
periode  de  Guerre;  et 

Etant  donne  que  I'Amerique  a  main- 
tenu  des  representants  en  France 
pendant  plus  d'une  annee  apr^s  la 
signature  de  I'Armistice  dans  le  but  de 
reeevoir,  d'enqueter  et  de  regler  toutes 
les  reclamations  presentees  ou  deposees 
contre  elle ;  et 

Etant  donne  que  le  travail  de  ces 
representants  a  ete  pratiquement  com- 
plete autant  que  la  reception,  I'enquete 
et  toutes  considerations  relatives  k  ces 
reclamations  I'ont  permis ;  et 


180 


UNITED  STATES  LIQUIDATION   COMMISSION. 


Whereas  France  has  agreed,  for  the 
t'onsiderations  herein  set  forth,  to 
■substitute  itself  for  America  in  refer- 
ence to,  and  guarantees  the  latter 
-against,  all  unsettled  claims,  and  also 
those  concerning  which  offers  of  set- 
tlement have  not  been  accepted,  aris- 
ing or  accruing  during  the  War  period, 
save  those  specifically  excepted  in 
Article  II  hereof; 

Now,  therefore,  in  consideration  of 
the  premises,  it  is  mutually  agreed  be- 
tween the  parties  hereto  as  follows : 

Article  I.  France  hereby  substitutes 
itself  for  America  in  reference  to,  and 
guarantees  the  latter  against,  all 
claims,  demands,  obligations,  rights, 
actions,  suits,  and  controversies  of 
every  nature,  arising  in  France  during 
the  said  war  period,  which  any  inhabi- 
tant or  any  person  subject  to  the  sov- 
ereignty of  France,  or  any  organiza- 
tion, association  or  corporation,  com- 
mune or  department  of  France  may 
now  have  or  which  may  hereafter  ac- 
crue, for  damage  to,  use  or  loss  of 
property,  or  injuries  to  or  death  of 
persons,  caused  by  or  reisulting  from 
acts  or  omissions  of  members  of  the 
American  Military  Forces,  or  of  any 
one  connected  therewith  (not  includ- 
ing members  of  the  American  welfare 
organizations)  during  the  said  war 
period,  particularly  the  following: 

(a)  All  claims  which  America  is 
authorized  to  pay  to  the  inhabitants  of 
France  under  an  act  of  America's  Con- 
gress approved  April  18,  1918,  entitled 
■"An  act  to  give  indenmit.v  for  damages 
caused  by  American  forces  abroad." 

(h)  All  claims,  whether  caused  by 
acts  or  omissions  of  members  of  the 
American  Military  Forces,  or  any 
other  persons,  arising  from  injury  to 
or  death  of  civilian  employees  and  la- 
borers of  America,  excepting  claims  of 
the  nationals  of  America  (workmen's 
compensation  cases). 

(c)  All  claims  for  the  occupation 
and    use    of    real    property,    damages 


Etant  donne  que  la  France  a  con- 
senti  pour  les  considerations  men- 
tionnees  ci-dessous  A  se  substituer  et 
par  suite  a  garantir  TAm^rique  contre 
toutes  reclamations  non  reglees  ou  dont 
les  offres  de  reglement  n'auront  pas 
6te  accept^es.  s'6levant  ou  s'accumu- 
lant  durant  la  p6riode  de  Guerre,  k 
I'exception  de  eel  les  mention6es  a 
I'Article  II  suivant ; 

En  consequence,  §tant  donn§  ce  qui 
precede,  il  est  decide  d'un  comnnui  ac- 
cord ce  qui  suit  entre  les  dites  par- 
ties. 

Article  I.  La  France  se  substitue 
par  les  presentes  a  I'Amerique  et  la 
garantit  contre  toutes  rechwnations, 
demandes.  obligations,  droits,  actions, 
poursuites  et  coutroverses  de  toute 
nature  ^l^v^s  en  Frahcie  pendant  la 
dite  i>§rio<le  de  (4uerre,  que  tout  habi- 
tant ou  tout  ressortissant  iPrangais  ou 
toute  autre  personne  morale,  commune 
ou  d^partement  de  France  pent  encore 
avoir  a  presenter  ou  qui  pourrait  par 
la  suite  ^tre  pr^sent#  pour  dommages, 
usage  ou  perte  de  biens ;  ou  donniiages 
aux  personnes  par  suite  de  blessures 
ou  de<es  causes  par,  on  resultant, 
d'actes  ou  negligences  «les  Membres  des 
Forces  Militaires  Americaines  ou  qui- 
conque  y  a  et6  rattache  (A  I'exclusion 
des  Membres  des  CEuvres  de  Bien- 
faisance  Americaines)  pendant  la  dite 
"p^riode  de  Guerre,  c'est  k  dire: 

(a)  Toutes  reclamations  que  I'Ame- 
rique est  autoris^s  5\  payer  aux  habi- 
tants de  France  par  I'Acte  du  Congres 
Americain  approuv^  le  18  Avril  1918 
et  intitule  "Acte  pour  donner  une  in- 
denmite  pour  donunages  causes  par  les 
Forces  Aniericaines  A  TExt^rieur." 

{f})  Toutes  reclamations  qu'elles 
previennent  d'acte  ou  de  negligence  des 
Membres  des  Forces  Militaires  Ameri- 
caines ou  toute  autre  per.sonne  et  ayant 
pour  causes  les  blessures  ou  la  mort 
occasionees  a  des  employes  et  ouvriers 
civils  de  I'Armee  Americaine  k  I'excep- 
tion des  reclamations  des  nationaux 
Americains  (Accidents  du  Travail). 

(r)  Toutes  reclamations  pour  occu- 
pation et  usage  de  biens  immobiliers. 


UNITED  STATES  LIQUIDATION   COMMISSION. 


181 


tliereto,  and  restoration  expenses,  re- 
sulting from  the  occupation  in  any 
manner  whatsoever  of  said  real  prop- 
erty by  the  American  Military  Forces. 

(d)  All  claims  resulting  from  requi- 
sitions, formal  or  informal,  for  the 
appropriations,  use,  damage,  or  de- 
struction of  personal  property. 

Article  II.  It  is  expressly  under- 
stood and  agreed,  hoicever,  that  the 
following  claims  are  excepted  from  the 
operation  of  this  agreement,  and  that 
France  does  not  assume  or  agree  to 
pay  the  following : 

(a)  All  claims  against  America  aris- 
ing from  breach  of  contracts  for  the 
manufacture  or  furnishing  of  supplies, 
materials,  or  equipments,  or  for  the 
rendition  of  services ;  except,  how^ever, 
all  leases  and  contracts  for  the  occupa- 
tion of  property. 

(h)  All  claims  cognizable  under  the 
general  Admiralty  law,  that  is  to  say, 
claims  by  or  against  vessels  of  Amer- 
ica. 

Article  III.  America  agrees  to  pay, 
in  cash,  the  sum  of  twelve  million  (frs. 
12,000,000)  francs  (hereinafter  desig- 
nated "  Minimum  payment  ") .  If  upon 
the  31st  day  of  December,  1923,  the 
aggregate  of  all  payments  made  by 
France  to  claimants  on  account  of  the 
claims  assumed  by  it  exceeds  said  min- 
imum payment,  then  in  such  event 
America  agrees,  on  demand,  to  then 
pay  to  France  such  excess,  provided, 
however,  that  such  additional  payment 
by  America  shall  in  no  event  exceed 
the  sum  of  six  million  (frs.  6,000,000) 
francs. 

Article  IV.  It  is  further  agreed  that 
the  12,(K)0.000  francs  mentioned  in  Art. 
Ill  hereof  as  the  minimum  payment 
will  be  added  to  the  indebtedness  in 
francs  which  America  has  acknowl- 
edged as  due  to  France  by  contract 
dated  'November  25th,  1919.  The 
method  of  payment  of  said  12,000,000 
francs  will  be  arranged  at  the  same 
time  as  the  method  of  payment  of  the 
sums  mentionetl  in  said  contract  of  No- 


donnnages  y  relatifs  et  depenses  de 
lemise  en  etat  quand  il  y  a  eu  occupa- 
tion par  les  Forces  Militaires  Ameri- 
caines  k  quelque  titre  que  ce  soit. 

id)  Toutes  reclamations  pour  re- 
quisitions (regulieres  ou  non)  pour  ap- 
propriation, usage,  d^gats  ou  destruc- 
tion des  biens  mobiliers. 

Article  II.  II  est  expressement  it- 
connu  et  convemi,  cependant,  que-leti^ 
reclamations  suivantes  sont  except^es 
des  clauses  de  ce  contrat  et  que  la 
France  ne  prend  pas  en  charge  et  ne 
consent  pas  k  payer  ce  qui  suit ; 

(a)  Toutes  reclamations  contre 
TAmerique  qui  sont  la  consequence  des 
ruptures  de  contrat  pour  la  fabrication 
ou  la  fourniture  d'approvisionnements, 
materiel  ou  equipement  ou  pour  services 
rendus,  et  k  I'exclusion  des  baux  et 
contrats  de  location. 

( 6 )  Toutes  les  reclamations  qui. 
tombent  sous  le  coup  de  Loi  G& 
nerale  d'Amiraut6,  c'est  k  dire,  les: 
reclamations  pour  ou  contre  les  vais- 
seaux  de  I'Amerique. 

Article  III.  L'Amerique,  acOepte  de 
payer  en  especes,  la  somme  de  douze 
millions  francs  (frs.  12,000,000)  (ci- 
apres  designee  comme  "Paiement  mini- 
mum"). Si  le  31  Decembre  1923  le  to- 
tal de  tons  les  paiements  affectues  par 
la  France  aux  reclamants  sur  les  recla- 
mations prises  en  oliarge  par  elle  depas- 
sait  le  paiement  minimum  sus-indique» 
dans  ce  cas  I'Amerique  accepte  de  payer 
a  la  France  sur  sa  demande  les  sommes 
en  excedent.  Sous  reserve,  cependant,. 
que  ce  paiement  additionel  fait  par 
I'Amerique  ne  devra  en  aucun  cas  d^- 
passer  la  somme  de  six  millions  'francs 
(frs.  6,000,000). 

Article  IV.  II  est  de  plus  entendu 
que  les  douze  millions  de  francs  in- 
diques  comme  prix  minimum  dans  I'Ar- 
ticle  ci-dessus  seront  ajoutes  a  la 
dette  en  francs  que  I'Amerique  a  re- 
connu  avoir  contrate  vis  k  vis  de  la 
France  par  le  contrat  du  25  Novembre 
1919.  Lo  modalites  de  paiement  de 
ces  douze  millions  de  francs  seront 
done  reglees  en  meme  temps  que  les 
modalites  de  paiement  des  sommes  in- 


182 


UNITED  STATES  LIQUIDATION   COMMISSION. 


vember  25tb,  1919.  This  method  and 
the  rate  of  exchange  for  the  conversion 
of  francs  into  dollars,  and  dollars  into 
francs,  will  be  made  the  subject  of  an 
airreement  to  be  entered  into  in  the 
future,  following  the  negotiations 
which  are  now  in  progress  on  this  sub- 
ject between  the  representatives  of  the 
two  Governments. 

Article  V.  America  agrees  to  leave 
in  France  until  December  31,  1923,  ac- 
4?eKsible  at  fill  times  to  the  authorized 
representatives  of  France,  all  records, 
reports,  and  corresijondence  of  every 
jjature  whatsoever  pertaining  to  claims 
assumed  by  France  hereunder,  and 
claims  of  like  nature  which  have  here- 
tofore been  settled  and  disposed  of  by 
America,  for  the  use  of  France  in  con- 
sidering and  dealing  with  all  pending 
claims  or  claims  that  may  hereafter  be 
presented. 


In  witness  whereof,  on  the  day  and 
year  first  above  written,  this  contract 
has  been  executed  in  four  parts,  each 
having  the  full  force  and  effect  of  an 
original  by  the  United  States  of 
America,  acting  through  the  United 
States  Liquidation  Commission — War 
Department,  E'dwin  B.  Parker,  chair- 
man, and  by  the  Republic  of  France, 
acting  through  M.  Edouard  Ignace,  le 
Sous-Secretaire  d'Etat  de  la  Justice 
Militaire  au  Ministere  de  la  Guerre. 

United  States  of  America, 
By  Edwin  B.  Parker, 
Chairman^  United  States  Liquidation 
Connnission — TT'rtr  Department. 

Republic  of  France, 
By  Edouard  Ignace, 
Sous-Secretaire  d'Etat  de  la  Justice 
Militaire  au  Ministere  de  la  Guerre. 


diqueesdans  leContrat  du2.j  du  Xovem- 
bre,  ces  modalites  et  le  taux  du  change 
pour  la  conversion  des  francs  en  dol- 
lars et  reciproquement  devant  faire 
rob  jet  d'un  accord  ulterieur  faisant 
suite  anx  n^giK'iations  qui  se  poursui- 
vent  A  ce  sujet  entre  les  rt -present ants 
des  deux  Gouvernements. 

Article  V.  L'Amerique  accepte  de 
laisser  en  France  jusqu'au  31  D4cem- 
bre  1923  k  la  disposition  i\  tout  mo- 
ment des  representants  autoris6s  de 
la  France  toutes  les  archives,  rapports 
et  correspondances  de  toute  nature  re- 
latifs  aux  reclamations  prises  en 
charge  par  la  France  par  les  presentes, 
et  relatifs  aux  reclamations  similaires 
qui  ont  §t6  jusqu'ici  reglees  par  rAm6- 
rique,  pour  les  besoins  de  la  Finance 
a  fin  de  consid6rer  et  r6gler  toutes  les 
reclamations  maintenant  en  instance 
ou  les  reclamations  qui  pourraieut  etre 
presentees  posterieurement. 

En  foi  de  quoi,  le  jour  et  Tan  au 
debut  prei-ites  ce  contrat  a  ete  redige 
en  quatre  exemplaire,  chacnn  d'eux 
ayant  la  meme  valeur  et  effet  qu'un 
original,  par  les  Etats-Uni  d'Ameri- 
que,  representes  par  lo  Commission  de 
Liquidation  des  Etats-Unis  du  D6- 
I)artement  de  la  Guerre.  Edwin  B. 
Parker,  President,  et  par  la  Repu- 
blique  Francaise,  representee  par  M. 
Edouard  Ignace,  Sous-secretaire  d'Etat 
de  la  Justice  Militaire  au  Minis; Tm-p  dp 
la  Guerre. 

Etats-Unis  D'AMKiiu^i  i.. 
Par  Edwin  B.  Parker. 
President,  Commission  de  Liquidation 

des    Etats-lnis,    Department    de    la 

Guerre. 

RKPURLIQI'H    FltANCAISE. 

Par  Edouard  Ignace, 
Sous-Secretaire   d'Etat    de   la   Justice 
Militaire  au  Ministere  dc  la  Guerre. 


APPENDIX  XXXIV. 

cuthell-brofferh)  agreement. 

This  agreement,  made  and  entered  into  this  1.3th  day  of  August.  A.  D.  1919, 
by  and  between  Coinm.  Gran  Croce  Federico  Brofferio,  Consigliere  di  Stato, 
and   duly   authorized   representative  of  the  under  secretary   of  the  treasury 


I 


UNITED  STATES  LIQUIDATION   COMMISSION.  183 

for  the  liquidation  of  the  arms  and  munitions  and  the  aeronautical  depart- 
ments, and  duly  authorized  representative  of  the  Interministerial  Committee 
of  the  Royal  Italian  Government  for  the  readjustment  of  the  industries  of 
the  war,  and  Mr.  Chester  W.  Cuthell,  special  representative  of  the  Secretary 
of  War  of  the  United  States  of  America,  witnesseth : 

Whereas  the  War  Department  of  the  United  States  has  requested  that  it 
be  reimbursed  by  Italy  for  moneys  paid  out  and  indebtedness  incurred  by 
it  in  behalf  of  Italy  both  under  formal  contracts  for  the  delivery  of  war 
materials  to  Italy  at  cost  and  under  informal  arrangements  made  to  supply 
such  war  materials  needed  by  Italy  in  the  prosecution  of  the  war  but  not . 
required  after  the  armistice,  the  nature  and  amounts  of  such  claims  of  the 
War  Department  being  set  forth  in  the  letters  addressed  to  Commandatore 
Brofferio  by  Mr.  Cuthell,  under  date  of  April  26.  1919,  and  by  Mr.  Ray,  as- 
sistant to  Mr.  Cuthell,  under  date  of  July  11,  1919 ;  and 

Whereas  Connnandatore  Brofferio  and  Chester  W.  Cuthell,  being  charged 
by  their  respective  Governments  to  determine  the  amounts  due  from  Italy  to 
the  War  Department  of  the  United  States  and  the  settlement  to  be  made 
therefor,  in  respect  to  the  matters  hereinafter  set  forth,  have  made  the  fol- 
lowing agreement  for  settlement  and  liquidation  thereof: 

Now,  therefore,  in  consideration  of  the  premises  and  of  the  importance  of 
avoiding  misunderstandings  and  delays  in  the  adjustment  of  war-time  trans- 
actions, the  parties  hereto,  ^  acting  for  and  in  behalf  of  their  respective  Gov- 
ernments and  the  departments  thereof  concerned  with  the  transactions  herein 
referred  to,  do  agree  as  follows: 

I. 

The  amounts  due  and  payable  by  Italy  to  the  Wnv  Department  in  respect 
to  picric  acid  (not  delivered),  spruce  and  fir,  and  niti'ocellulose  powder  are 
as  follows : 

Picric  acid $4,000,000 

Spruce  and  fir 1,  700,  000 

Nitrocellulose  powder 250,  000 


5,  950,  000 
The  W^ar  Department  will  make  to   Italy  an   allowance  of  seven  hundred 
afty  thousand  dollars  ($750,000.00)  to  be  applied  upon  said  sum  of  five  million 
nine  hundred  fifty  thousand  dollars    ($5,9^0,000.00),  making  the  balance  due 
thereon  five  million  two  hundred  thousand  dollars  ($5,200,000.00). 

II. 

Tlie  War  Department  will  waive  and  cancel  its  claims  against  Italy  for  four 
million  thirty-eight  thousand  dollars  ($4,038,000.00)  for  trinitrotoluol,  for  one 
million  three  hundred  twenty-three  thousand  dollars  ($1,323,000.00)  for  cotton 
1  inters. 

III. 

Italy  hereby  cancels  and  releases  any  and  all  claims  arising  from  facts  and 
involving  principles  similar  to  these  upon  which  the  claims  above  referred  to 
are  based  which  Italy  has  or  may  have  against  the  War  Department,  includ- 
ing, among  others,  claims  to  be  reimbursed  for  expenditures  made  for  exten- 
sions of  plants  for  the  manufacture  of  airplanes,  hydroplanes,  automobiles,  and 


184  UNITED  STATES  LIQUIDATION   COMMISSION. 

other  war  materials  in  Italy,  for  losses  sustained  by  Italy  upon  raw  materials 
accumulated  for  such,  manufacture,  and  for  excess  of  actual  costs  of  materials 
supplied  to  the  War  Department  over  the  amounts  for  which  such  materials 
have  been  invoiced  to  the  War  Department.  All  property,  equipment,  raw 
materials,  and  finished  products  acquired  by  Italy  in  respect  to  the  claims, 
hereby  waived  by  it  shall  be  and  remain  the  sole  property  of  Italy.  Cora- 
mandatore  Brofferio  states  that  the  claims  hereby  waived  by  Italy  exceed  one 
million  dollars  ($1,000,000.00)  in  amount.  Mr.  Ray  states  that  he  does  not 
know  of  the  existence  of  any  claims  of  the  War  Department  against  Italy 
other  than  those  set  forth  in  this  agreement  which  arise  from  facts  or  involve 
principles  similar  to  those  upon  which  the  claims  referred  to  in  this  agreement 
are  based. 

IV. 

The  following  claims  of  the  War  Department  against  Italy  are  balances  due 
for  the  cost  of  commodities  delivered  to  Italy,  concerning  which  Commandatore 
Brofferio  states  that  he  has  not  sufficient  information  to  justify  the  inclusion 
of  any  particular  amounts  therefor  in  this  agreement : 

Picric  acid  excess  raw  material  cost $319,  000 

Ammonium  nitrate 1.56,656 

Overcoats 147,  789 

Dixie  magnetos ' 47, 175 

Liberty  motors 26,728 

Invoices  therefor  have  been  presented  to  the  Italian  Military  Mission  in  the 
United  States,  but  the  War  Department  records  show  that  payment  thereof 
has  not  yet  been  made.  Commandatore  Brofferio  has  been  informed  that  the 
invoice  for  Liberty  motors,  above  referred  to,  has  been  paid.  If  they  have  not 
been  paid  the  invoices  for  these  commodities  shall,  in  the  lisual  course,  be 
paid  by  the  Italian  Military  Mission  at  Washington,  D.  C,  as  and  when  such 
invoices  shall  have  been  duly  audited  by  it.  Directions  to  this  effect  shall  be 
forwarded  to  the  Italian  Military  Mission  immediately. 

The  War  Department  has  rendered  to  the  Italian  Military  Mission  in  the 
United  States  invoices  in  the  sum  of  one  hundred  eighty-four  thousand  eighty 
dollars  ($184,080.00),  for  copper  ingots  shipped  to  Italy  in  connection  with  the 
electrification  of  the  Modane  Railway.  These  invoices  have  not  been  paid. 
The  question  of  who  shall  pay  for  that  improvement  is  before  the  Supreme 
Interallied  Authorities.  This  agreement  shall  not  affect  in  any  way  the  rights 
ot  Italy  or  the  War  Department  in  respect  to  payment  for  said  copper.  It  Is 
convenient  that  settlement  for  said  copper  shall  await  the  decision  of  the 
Supreme  War  Council  or  other  competent  authority  and  be  made  in  accordance 
therewith. 

V. 

It  is  understood  and  agreed  that  the  figures  herein  above  set  forth  in  para- 
graphs 1  and  2  are  based  in  part  upon  estimates  and  that  this  settlement  is 
made  arbitrarily  in  the  interests  of  both  Governments.  No  further  accounting 
shall  be  requested  by  either  in  respect  thereto,  either  as  to  salvage  values  or 
otherwise.  All  property,  equipment,  raw  material,  and  finished  products  ac- 
quired by  the  United  States  in  the  transactions  from  which  such  claims  arise 
shall  be  and  remain  the  sole  property  of  the  United  States. 


UNITED  STATES  LIQUIDATION   COMMISSION. 
VI. 


185 


The  purpose  of  this  agreement  is  the  determination  of  the  amounts  now  due 
from  Italy  in  connection  with  the  supply  of  war  materials  requested  in  behalf 
of  the  Italian  Army  for  the  prosecution  of  the  war.  The  question  of 
whether  payment  of  the  amount  of  five  million  two  hundred  thousand  dollars 
($5,200,000.00)  set  forth  in  paragraph  1  can  be  made  by  credits  from  the  United 
States  is  solely  within  the  jurisdiction  of  the  Treasury  Departments  of  the  two 
countries. 

In  witness  whereof,  the  parties  hereto  have  hereunto  set  the.ir  hands  upon^ 
duplicate  originals,  the  day  and  year  first  above  written. 

(Signed)  Federico  Bbofferio, 

Co  mm.   Gr.   Cr.  Authorized  Representative   of  the  In- 
termimsterial  Committee  of  the  Italian  Government 
for  the  Readjustment  of  the  Industries  of  War. 
(Signed)  Chester  W.  Cuthell, 

Special  Representative  of  the  Secretary  of  War  of  the 
United  States  of  America. 

By  .John  H.  Ray,  .Jr.,  Assistant. 


In  presence  of: 
(Signed) 
(Signed) 


F.  C.  Weems. 
F.  Vimercarti. 


APPENDIX  XXXV. 

General  Settlement  Between  United  States  of  America  and  Kingdom   of 
Italy,  February  IS,  1920. 


This  contract  entered  into  this  IStli 
day  of  February,  1920,  by  and  between 
the  United  States  of  America  (herein- 
after called  "America")  acting  through 
the  United  States  Liquidation  Com- 
mission— War  Department,  Edwin  B. 
Parker,  chairman  (by  Harry  T.  Klein, 
special  representative), of  the  one  part ; 
and  the  Kingdom  of  Italy  (hereinafter 
called  "Italy"),  acting  through  Gen- 
eral Angelo  Modena  for  the  Ministry 
of  War,  representing  also  the  former 
ministry  of  arms  and  ammunitions,  and 
the  other  ministries  of  the  Kingdom  of 
Italy,  according  to  the  delegation  re- 
ceived from  the  council  of  ministers, 
of  the  other  part,  witnesseth: 

That,  ivhereas,  between  the  6th  day 
of  April,  1917,  and  the  31st  day  of  De- 
cember, 1919  (hereinafter  designated 
war  period),  the  War  Department  of 
the  United  States  of  America  and  the 
American  Expeditionary  Forces  on  the 
one  part   (hereinafter  called  War  De- 


Col  presente  contratto  stipulato  il 
16mo  Febbraio  1920  da  e  tra  gli  Stati 
Uniti  di  America  (dora  innanzi  chis- 
mati  "America")  rappresentati  dalla 
Commissione  di  Liquidazione  degli 
Stati  Uniti,  Dipartimento  della  Guerra, 
di  cui  e  presidente  il  Sig.  Edwin  B. 
Parker,  per  mezzo  del  Sig.  Harry  T. 
Klein,  "  Delegato  Speciale "  da  uii 
lato,  e  il  Regno  d'  Italia  (d'  ora  in- 
nanzi chiamato  "Italia"),  rappresen- 
tato  dal  Generale  Angelo  Modena  per 
il  Ministero  della  Guerra,  in  rappre- 
sentanza  anche  dell'  ex-Ministero  Arm! 
e  Munizioni  e  degli  altri  Ministeri  del 
Regno  d'  Italia,  giusta  delegazione 
avuta  dal  Consiglio  dei  Ministri,  dall' 
altro  lato,  si  stipula : 

Considerato  che  tra  il  6  Aprile  1917 
e  il  31  Dicembre  1919  (da  qui  innanzi 
chiamato  "  Periodo  di  guerra")  il  Di- 
partimento della  Guerra  degli  Stati 
Uniti  di  America  e  le  Forze  Spedizio- 
narie  Americane  da  un  lato  (di  qui 
innanzi  chiamati  "  Dipartimento  della 


186 


UNITED  STATES  LIQUIDATION   COMMISSION. 


pjirtment )  and  the  Ministry  of  War, 
tlie  former  ministry  of  arms  and  am- 
munition of  Italy,  and  the  Italian 
Army  (hereinafter  called  Ministry  of 
War)  on  the  other  part,  had  nimierous 
transactions  between  each  other  con- 
nected with  or  incidental  to  the  con- 
duct of  the  war  in  the  prosecution  of 
which  the  parties  were  associated  ;  and 
Whereas  America  and  Italy  desire, 
with  respect  to  such  transactions  as 
occurred  in  France.  Italy,  and  regions 
adjoining  Italy,  to  make  a  full,  final, 
and  complete  settlement  of  all  bills,  ac- 
counts, claims,  obligations,  demands, 
rights,  and  causes  of  action  of  every 
nature  whatsoever,  whether  growing 
out  of  the  delivery  of  or  contracts  for 
the  delivery  of  materials,  supplies,  or 
equipment ;  or  for  services  rendered 
or  contracted  to  be  rendered;  or  for 
the  occupation  and  use  of  all  public 
properties  of  Italy,  and  all  damages 
thereto;  or  otherwise,  initiated,  aris- 
ing or  accruing  during  the  .said  war 
period,  said  settlement  to  be  herein- 
after designated  as  general  settlement ; 
and 

Whereas,  the  nnlitary  forces  of 
America  have,  as  incidental  to  or  con- 
nected with  the  conduct  of  the  war,  oc- 
cupied and  used  real  property,  ap- 
propriated and  used  personal  property, 
damaged  real  and  personal  property, 
and  damaged  individuals,  resulting  in 
their  injury  or  death ;  all  of  which  said 
occupancies,  appropriations,  uses,  and 
damages  occurred  durinn:  the  said  war 
period — and  for  which  Italy  has  agreed 
to  substitute  herself  for  America  and 
guarantee  America  against  all  such 
unsettled  claims,  for  the  consideration 
hereinafter  set  forth  :  and 


Whereas,  the  parties  hereto  in  ar- 
riving at  such  general  settlement  have 
agreed  that  in  respect  to  the  transac- 
tions aforesaid,  there  is  due  by  Italy  to 
America  the  sum  of  four  million  six 
hundred  sixty-nine  thousand  nine  liun- 
dred  and  seventy-four  lire  and  seventy- 


(Uierra")  e  il  Ministero  della  Guerra, 
I'  ex  Ministero  della  Armi  e  Munizioni 
deir  Italia  e  TEsercito  Italiano  (d'  ora 
innanzi  chiamati  "  Ministero  della 
Guerra")  dall'  altro  lato.  eberro  nu- 
ineros<»  transasioni  tra  di  loro,  con- 
upsse  <)  dipendenti  dalla  condotta  della 
guerra.  neliu"  prosecuzione  della  quale 
le  due  parti  erano  associate;  o 

Ccmsiderato  che  l'  America  e  l'  Italia 
desiderano,  rispetto  a  tutte  le  transa- 
zioni  che  ebl^ero  luego  in  Francia, 
Italia  e  regioni  ftnitime  all'  Italia,  di 
fare  un  totale,  finale  e  completo  rego- 
lamento  di  tutte  le  fatture,  conti,  le- 
clami.  obbligazioni,  demande,  diritti  e 
cause  di  azione,  di  ogni  e  qualziasl 
natura,  sia  sergenti  dalla  consegna  o  da 
conti'atti  per  la  consegna  di  materiale, 
f()rniture  o  equipaggiamento,  a  per 
servizi  resi  o  contrattati  perchS  fos- 
sero  resi,  o  per  la  occupazione  e  use 
di  ogni  propriety  pubblica  d'  Italia, 
e  tutti  i  danni  inerenti,  sia  in  altro 
modo ;  iniziati,  sorti  o  derivanti  du- 
rante il  detto  "  Periodo  di  guerra," 
dovendo  tale  regolamento  d'  ora  in- 
nanzi essere  designate  come  •'  Regola- 
mento Generale  " ;  o 

Considerato  che  le  forze  militari 
deir  America  hanno  in  conseguenza  e 
in  dipendenza  della  condotta  della 
guerra  occui)at<»  o  usato  proprietJl 
innnobiliari,  preso  i)ossesso  e  usato  di 
propriety  mobiliari,  dannoggiato  pro- 
}>riet{l  inmiobiliari  e  mobilijiri,  e  cau- 
sato  danni  a  individui.  che  risultarouo 
in  ferite  o  morte  dei  medesimi ;  tutte 
le  quali  occupazioni,  preso  di  possess^, 
usi  e  danni  sono  accorsi  durante  il 
detto  "  Feriodo  di  guerra",  e  per  cui  1' 
Italia  ha  convenuto  di  so.stituirsi  all' 
America  a  garantire  la  stessa  contro 
tutti  i  detti  non  ancora  regolati  re- 
clami  alle  condizioni  qui'  sotto  indi- 
cate; e 

Considerato  che  le  parti  in  parola 
nel  giungere  a  tale  Regolamento  gene- 
rale  hanno  convenuto  che  per  rispetto 
alle  transazioni  summenzionate  risulta 
un  debito  dell'  Italia  verso  1'  America 
di  quattro  milioni  sei  cento  sessanta 
nove  mi  la  nove  cento  settanta  quattro 


UNITED  STATES  LIQUIDATION   COMMISSION. 


187 


one  centimes  (lire  4,669,974.71),  and 
there  is  due  by  America  to  Italy  the 
sum  of  thirty-three  million  seven  hun- 
dred seventy-six  thousand  five  hundred 
twenty-one  lire  and  forty-four  centimes 
(lire  33.776.521.44),  and  that  there  is 
therefore  a  net  balance  of  twenty-nine 
million  one  hundred  six  thousand  five 
hundred  forty-six  lire  and  seventy-five 
centimes  (lire  29,106,546.75)  due  Italy, 
according  to  the  liquidation  account  at- 
tached to  this  agreement. 

Now,  therefore,  in  consideration  of 
the  premises,  it  is  mutually  agreed  be- 
tween the  parties  hereto  as  follows: 

Article  1.  America  agrees  to  pay  in 
cash  to  Italy  through  the  Ministry  of 
War  the  said  balance  of  twenty-nine 
million  one  hundred  six  thousand  five 
hundred  forty-six  lire  and  seventy-five 
centimes  (lire  29.106,546.75)  within  a 
month  from  the  signature  of  the  pres- 
ent agreement. 

Article  2.  Italy  does  hereby  fully, 
completely  and  in  all  things  release 
and  discharge  America,  and  America 
does  hereby  fully,  completely  and  in  all 
things,  release,  and  discharge  Italy,  in 
respect  to  all  of  said  transactions  afore- 
said arising  in  France,  Italy  and 
regions  adjoining  Italy,  from  all  bills, 
accounts,  claims,  obligations,  demands, 
rights,  causes  of  action,  suits,  and  con- 
troversies of  every  nature  whatsoever, 
which  either  party  now  has  against  the 
other,  or  which  may  hereafter  arise, 
whether  by  reason  of  or  in  ai>y  wise 
incident  to  or  growing  out  of  the  de- 
livery of  or  contracts  for  the  delivery 
of  materials,  supplies,  or  equipment,  or 
for  services  rendered  or  contracted  to 
be  rendered,  or  for  the  occupation  and 
use  of  all  public  properties  of  Italy, 
and  damages  thereto,  or  otherwise, 
initiated,  arising,  or  accruing  in  France, 
Italy,  and  regions  adjoining  Italy  dur- 
ing the  said  war  period  l^etween  the 
War  Department  on  the  one  part  and 
the  Ministry  of  War,  representing  also 
the  other  ministries,  on  the  other. 


lire  e  settanta  uno  centesimi  (lire 
4,669,974.71)  ed  un  debito  dell'  America 
a  favorc  dell'  Italia  di  ti'enta  tre  milioni 
sette  cento  settanta  sei  mila  cinque 
cento  venti  una  lire  e  quaranta  quat- 
tro  centesimi  (33,776.521.44)  ;  e  percio 
una  differenza  attiva  a  favore  dell' 
Italia  di  venti  nove  milioni  cento  sei 
mila  cinque  cento  quaranta  sei  lire  e 
settanta  cinque  centesimi  (lire  29.106,— 
546.75)  come  da  conto  di  liquidazione 
die  si  allega  al  presente  contratto. 

In  vista  di  quanto  sopra  si  6  con- 
venuto  tra  le  due  parti  quanto  segue: 

Aeticolo  1.  L'  America  s"  impegnu 
di  pagare  in  contanti  all'  Italia  e  per 
essa  al  Ministero  del  la  Guerra  la  detta 
somma  di  venti  nove  milioni  cento  sei 
mila  cinque  cento  quaranta  sei  lire  e 
settanta  cinque  centesimi  (lire  29,106,- 
546.75)  entre  un  mese  dalla  firma 
della  presente  Convenzione. 

Articolo  2.  L'ltalia  col  presente  con- 
trato  totalmente  e  completamente  e 
sotto  ogni  punto  di  vista  libera  o 
scarica  1'  America,  e  V  America  col 
presente  contratto  totalmente  e  com- 
pletamente e  sotto  ogni  punto  di  vista 
libera  e  scarica  V  Italia,  per  rispetto  a 
tutte  le  summenzionate  transazioni 
che  ebbero  luogo  in  Francia,  Italia  e 
regioni  fiinitime  all'  Italia,  da  ogni  fat- 
tura,  conto,  reclamo,  obbligazione,  do- 
manda,  diritto.  causa  di  azione,  pro- 
cesso  e  controversio  di  qualsiasi  natura 
che  ognuna  delle  due  parti  ha  orji 
contro  r  altra,  o  che  puo  sorgere  in 
seguito;  sia  causati,  sia  in  qualsivo- 
glia  modo  risultanti  o  derivanti  dalla 
consegna  o  dai  contratti  di  consegna 
di  materiali,  forniture  o  equipaggia- 
menti,  o  da  servizi  resi  o  contrattati 
perche  fossero  resi,  o  dall'  occupa- 
zione  e  uso  di  qualsiasi  pubblica  pro- 
prietjl  in  Italia,  e  danni  inerenti,  o 
in  altro  modo;  iuiziati,  sorti  o  deri- 
vanti in  Francia,  Italia  e  regioni  fini- 
time  air  Italia  durante  il  detto  Peric- 
do  di  guerra  tra  il  Dipartimento  della 
Guerra  da  un  lato  e  il  Ministero  della 
Guerra,  in  rappresentanza  anche  degli 
altri  Minister!,  dall'  altro  lato. 


188 


UNITED  STATES  LIQUIDATION   COMMISSION. 


Article  3.  Italy  does  hereby  agree 
to  indemnify  and  save  America  harm- 
less, and  does  hereby  fully,  completely, 
and  in  all  things  release  and  discharge 
America  from  all  claims,  demands,  ob- 
ligations, liabilities,  suits,  and  contro- 
versies of  every  kind  and  nature  aris- 
ing in  France,  Italy,  and  regions  ad- 
joining Italy  during  said  war  period, 
which  any  inhabitant  of  Italy  or  any 
person  subject  to  the  sovereignty  of 
Italy,  or  any  orgauization,  association, 
or  corporation,  commune,  or  Province 
of  Italy  may  now  have;  or  which  may 
liereafter  accrue,  for  damage  to.  use, 
•  tcupation,  or  loss  of  property,  real  or 
personal ;  or  injuries  to  or  death  of 
persons,  caused  by  or  resulting  from 
acts  or  omissions  of  the  American  Mili- 
tary Forces,  or  of  anyone  connected 
therewith,  and  which  have  not  already 
Iteen  paid  directly  by  America. 

Article  4.  Nothing  hereinbefore  con- 
tained shall  be  held  or  construed  to  in 
any  wise  annul,  alter,  modify,  or  affect 
the  formal  obligations  of  Italy  held  by 
America  (which  do  not  concern  the 
items  included  in  the  accounts  hereto 
j.nnexed)  ;  or  the  obligations  of  either 
party  arising  out  of  contracts,  agree- 
ments, or  arrangements  entered  into  be- 
vtH'ii  said  parties  in  America,  or  to  in 
.  iiy  wise  affect  any  matters  now  pend- 
ing in  America  between  said  parties. 
This  agreement  does  not  in  any  way 
alter  or  affect  the  contract  made  be- 
tween Feclerico  Brofferio,  representing 
Itiily,  and  Chester  W.  Cuthell,  repre- 
senting America,  dated  August  13, 1919, 
nor  the  contract  made  between  Comm. 
Arrigo  Gullini,  representing  Italy,  and 
Major  W.  S.  Franklin,  representing 
America,  dated  March  16,  1919,  relative 
to  the  transportation  of  American 
troops  from  Italy  and  Marseille  to 
America.  The  claim  of  America 
against  Italy  for  copper  ingots  shipped 
to  Italy  for  the  electrification  of  the 
Modane  Railroad  is  not  covered  by 
this  general  settlement,  said  claim  be- 
ing held  in  abeyance  pending  a  de- 
cision  of  the  Inter-Allied   Reparation 


Articolo  III.  L'ltalia  col  presente 
contratto  si  obbliga  a  sostituirsi  all' 
America  garantendola  totalmente,  com- 
pletamento  e  sotto  ogni  punto  di  vista 
llverandola  e  scaricandola  riguardo  a 
tutti  i  reclami,  demande,  obbligazioni, 
debiti.  pi-ocessi  e  controversia  di  ogni 
genero  e  natura  sorgenti  in  Francia, 
Italia  e  regioni  finitime  all'  Italia  du- 
rante il  detto  Periodo  di  guerra,  che 
qualunque  abitante  d'  Italia,  o  qualun- 
que  persona  soggetta  alia  sobranita 
d'  Italia,  o  qualunque  organizzazione, 
ass(»ciazione,  corporazione,  Comune  o 
Provincia  d'  Italia  sellevi  o  possa  solle- 
vare  piii  tardi  per  danni,  uso,  occupa- 
zione  o  i^erdita  di  propriety  innnobi- 
liare,  o  mobiliare  o  tVrite  o  morte  di 
l)ersone  causate  o  risultanti  da  atti  o 
omi.ssicmi  delle  forzo  militari  ameri- 
cane  o  di  chiunque  connesso  coUe 
medesime,  che  non  siano  gi^  stati  pa- 
gati   direttamente   dall'   America. 

Articolo  IV.  Nulla  di  quanto  6  eon- 
tenuto  nol  presente  contratto  dovrft  es- 
sere  ritenuto  o  interpretato  por  annul- 
lare,  alterare,  moditicare  o  influire  in 
alcun  modo  sulle  obbligazioni  formall 
deir  Italia  nelle  jnani  dell'  America 
(che  non  riguardino  le  partite  comprose 
nel  conto  allegato)  o  sulle  obbligazioni 
di  ambo  le  parte  sorgenti  da  contratti, 
accordi  o  regolamenti  stipulati  tra  le 
due  parti  in  America ;  o  por  esercitare 
qualsiasi  effetto  sulle  questioni  ora 
pendenti  in  America  tra  le  due  parti 
sumnienzionate.  Questa  convenzione 
non  riguarda  o  altera  in  alcun  modo 
il  contratto  stipulato  tra  il  Sr,  Fede- 
I'ico  Brofferio  in  rappresentanza  dell' 
Italia  e  il  Sr.  Chester  W.  Cuthell  in 
rappresentanza  dell'  America,  in  data 
13  Agosto  1919,  e  nemmano  quelle 
siipulato  fra  il  Sr.  Connu.  Arrigo  Gul- 
lini in  rappresentanza  dell'  Italia  e  il 
Sr.  :Maggiore  W.  S,  Franklin  in  rap- 
presentanza deir  America,  in  data  16 
Marzo  1919,  relative  al  trasporto  delle 
truppe  americane  dall'  Italia  e  da 
Marsiglia  in  America.  II  reclamo  dell' 
America  contro  l'ltalia  per  verghe  di 
rame  spedite  in  Italia  per  I'elettrifi- 
cazione  della  ferrovia  di  Modane  non 


UNITED  STATES  LIQUIDATION   COMMISSION. 


189 


Commission  on  the  question  as  to  who 
should  pay  for  said  improvement. 


Article  5.  This  contract  shall  not 
be  construed  to  relate  to  or  in  any- 
wise affect  transactions  pertaining  to 
any  department  or  departments. 
;.agency  or  agencies,  of  the  United 
States  of  America  other  than  said 
V  War  Department,  and  all  of  the 
agencies  of  said  War  Department  and 
the  American  Army  and  all  of  its 
branches  and  agencies. 


In  witness  whereof  on  the  day  and 
year  first  above  written  this  contract 
has  been  executed  in  four  parts,  each 
having  the  full  force  and  effect  of  an 
original,  by  America  acting  through 
the  United  States  Liquidation  Com- 
mission— War  Department.  Edwin  B. 
Parker,  chairman  (by  Harry  T.  Klein, 
special  representative),  and  by  Italy, 
acting  through  General  Angelo  Mo- 
dena,  for  the  Ministry  of  War.  and 
also  for  the  former  ministry  of  arms 
and  ammunition  and  the  other  minis- 
tries. 

United  States  of  America. 
For   United    States   Liquidation 
Cmiimission — Wa r    D epa rtmen t. 
Edwin   B.   Parker,   Chairman. 

By    Harry  T.  Klein, 

Special   Representative. 
KiNGDOivt  OF  Italy. 

For   the   ministry   of   War   and 
also     Represent  infj     tJic     Other 
Ministries. 
By  Angelo  ^Modena. 

Maior   General. 


^  coperto  dal  presente  Regolamento 
Gtenerale  tale  reclamo  dovendo  essere 
tenuto  in  sospezo  in  attesa  di  una  de- 
cisione  della  Commissione  interalleata 
delle  riparazioni  sulla  questione ;  Chi 
deve  pagare  per  tale  miglioramento. 

Articolo  V.  Questo  contra tto  non 
potra  essere  interpretato  come  rife- 
rentesi  o  in  qualsiasi  modo  riguardante 
transazioni  concernenti  qualsiasi  Di- 
partimento  o  Dipartimenti,  Rapp^- 
sentanza  o  Happresentanze  degli  Stati 
Uniti  di  America  all'  iufuori  del  detto 
Dipartimento  della  Guerra  o  tutte  le 
Rappresentanze  del  modesimo  Diparti- 
mento della  Guerra  e  I'Esercito  Ameri- 
cano e  tutti  i  suoi  rami  e  Rappresen- 
tanze. 

In   testlmonianza   di   quanto   sopra, 
nel  giorno  o  anno .  scritti  in  principio, 
ii  presente  contrattp  §  stato  redatto  in 
quattro     copie.     ciascuna     avente     la 
plena  forza  e  I'effetto  di  un  originale, 
dali'     America,     rappresentata     dalla 
Commissione     di     I^iquidazione     degli 
Stati  Uniti,  Dipartimento  della  Guer- 
ra, di  cui  e  Presidente  il  Sr.  Edwin  B. 
Parker,   in  persona  del   Sr.  Harry  T. 
Klein,  Delegato  Speciale,  e  dall'  Italia, 
rappresentata    dal    Generale    Angelo 
Modena,  pel  Ministero  della  Guerra  e 
anche  per  V  ex-Ministero  Armi  e  Mii- 
nizioni  e  per  gli  altri  Ministeri. 
Stati  Uniti  di  America, 
Par  la   Commissione   de   Liquida- 
sione   degli   Stati   Uniti — Departi- 
mento    della     Gnerra.    Edwin     B. 
Parker,  Presidente. 
Per  Harry  T.  Klein. 

Delagato  Speciale. 
Regno  d'Italia. 
Pel  Ministero  della  Guerra  in  rap- 
present  anza  anche  degli  altri  Mir 
nisteri. 
Per  Angelo  Modena. 

Maggiore  Generale. 


190 


UNITED  STATES  LIQUIDATION   COMMISSION. 


Statement  of  accounts  of  the  Italian  and  American  Governments  for  general 

settlement. 


ITALIAN    ACCOUNTS. 


AMBEICAN    ACCOUNTS. 


Railway    transportation  ac- 
count     

Miscella- 
n  e  o  u  s 
material 
( to  have 
been 
paid  for 
in  cash)   L3,  823,  420.50 

Less  bills 
for  Sig- 
n  a  1 
C  o  r  p  s 
for  labor 
and  ma- 
t  erial, 
disal- 
lowed __  8,076.47 

Subsistence  stores  and 
oth<'r  material  to  have 
been  returned  in  kind, 
$.*i82,  802.  03  ;  rate  of  ex- 
change 13  lire  to  $1 

Aviation  account  (see 
proems  verbal  of  Decem- 
ber 10,  1919) 

Artillery  account,  gold  fr. 
2,  705,  398.  40  ;  rate  of 
exchange  2.0526  lire  to 
1   gold  franc 

R.  R.  &  C.  account 

American  Relief  Adminis- 
tration  account  


lAre. 
1, 166,  512.  40 


Lire. 


Q.  M.  Corps  bills,  $41,374.04  ; 
rate  of  exchange  13  lire 
to    $1 537,862.52 

Medical  Corps  bills,  fr. 
1,514,191.71  ;  rate  of  ex- 
change 1.20  lire  to  1  fr__  1,  817,  030.  05 

Transportation  Corps  bills—  2,  128,  700.  00 

Q,  M.  Corps  bills  against 
Italian  officers'  mess,  Lyon, 
France   77,497.14 

Q.  M.  Corps  bills  for  miscel- 
laneous   material 108,  885.  00 


3,  815,  353.  03 

4,  976,  426.  39 
18,  073,  348. 17 


5,  553, 100.  75 
180,  000.  00 

11,  780.  70 


Gross  amount 33,776,521.44 


Gross  amount 4. 


),  974.  71 


recapiti:lation. 


Lire. 

Gross  amount  due  Italy 33,  776,  521.  44 

Gross  amount  due  America 4,669,974.71 

Net  amount  due  Italy 29,106.546.75 

This  statement  is  in  absolute  agreement  with  the  statement  presented  by  the  Italiaa 
office  charged  with  making  general  settlement  for  Italy. 

(Signed)  Victor  A.  Libretti, 

2nd   Lieut.,  Q.  M.   Corps,   U.   S.  Army. 

Washington,  D.  C.  May  25th,  1920. 
Memorandum  to  be  attached  to  all  copies  of  .statement  of  accounts  of  Italian 
and  American  Governments  for  general  settlement,  being  basis  of  the  general 
settlement  of  February  18th.  1920  (to  be  attached  to  all  copies  of  contract  in 
files). 

1.  In  the  column  of  credits  to  the  American  account  in  the  attached  gen- 
eral statement  of  accounts  of  the  Italian  and  American  Governments,  item 
number  1,  entitled  "  Q.  M.  C.  bills,"  amounting  to  $41,374.04,  should  read, 
"  American  bills,  in  dollars,"  and  includes  the  following : 

(1)  Motor  Transport  Corps  bills,  in  dollars,  against  the 

Italian  Government ^ > $120,  35 

(2)  Ordnance  Corps  bills,  in  dollars,  against  the  Italian 

Government 3,  511.  35 

(3)  Quartermaster  Corps  bills,  in  dollars,  against  the 

Italian   Government 37,  74^  34 

Total 41,  374.  04 


UNITED  STATES  LIQUIDATION   COMMISSION.  191 

2.  Item  number  2,  entitled  "  Medical  Corps  bills,"  amounting  to  frs.  1.514,191.71, 
should  read,  "American  bills  in  francs,"  and  includes  the  following: 

Frs. 

(1)  Medical  Corps  bills  in  francs  against  the  Italian 

Government 264,  279.  50 

(2)  Ordnance    Corps    bills    in    francs    against    the 

Italian    Government 1,  249,  702.  21 

(3)  Quartermaster  Corps  bills  in  francs  against  the 

Italian  Government 210.  00 

Total 1,514, 191.  71^- 

3.  Item  number  3,  entitled  "  Transportation  Corps  bills,"  amounting  to  lire 
2.128,700.00,  should  read,  "  Motor  Transport  Corps  bills." 

Louis  Bboido. 


APPENDIX  XXXVI. 

United  States  Liquidation  Commission — War  Depabtment. 
statement  of  expenditures  from  date  of  organization,  february  11,  1919,  to 

MAY    31,    1920. 

Salaries  of  CommLssioners $31,  449.  97 

Foreign  per  diem  allowance  of  Commissioners 13,  529. 13 

Salaries  of  civilian  employees 85,949.77 

Foreign  per  diem  allowance  of  civilian  employees 63,  419,  44 

Foreign  per  diem  allowance  and  expenses  of  military  personnel 15, 046.  86 

Office  supplies,  printing,  etc 1,  701.  72 

Loss  on  exchange 11.  706.  28 

Total 222,  803. 17 

o 


1^^ 

■/'/  ■ 


LJ 


14  DAY  USE 

RETURN  TO  DESK  FROM  WHICH  BORROWED 

LOAN  DEPT. 

RENEWALS  ONIY— TEU  NO.  **S-M05 

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